EXHIBIT 10.1
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ACQUISITION AGREEMENT
BY AND AMONG
IMRGLOBAL CORP.,
IMR SUB AB CORP.,
FUSION SYSTEM JAPAN CO., LTD.,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ AND MAMI ALFANT
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS............................... 1
Section 1.1 DEFINITIONS..................................................... 1
ARTICLE II
THE ACQUISITION.............................. 7
Section 2.1 BASIC TRANSACTION.............................................. 7
Section 2.2 CLOSING........................................................ 7
Section 2.3 DELIVERIES AT THE CLOSING; EXCHANGE OF SHARES.................. 7
Section 2.4 NO FURTHER OWNERSHIP RIGHTS IN FUSION STOCK.................... 8
Section 2.5 TAXES.......................................................... 8
Section 2.6 NO FRACTIONAL SHARES........................................... 8
Section 2.7 LOST, STOLEN OR DESTROYED CERTIFICATES......................... 8
Section 2.8 CERTAIN ADJUSTMENTS............................................ 8
Section 2.9 PRIVATE PLACEMENT.............................................. 8
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE
FUSION SHAREHOLDERS AND FUSION...................... 9
Section 3.1 TITLE TO FUSION STOCK.......................................... 9
Section 3.2 POWER AND AUTHORITY OF FUSION SHAREHOLDERS..................... 9
Section 3.3 ORGANIZATION................................................... 9
Section 3.4 CAPITALIZATION................................................. 10
Section 3.5 AUTHORITY...................................................... 10
Section 3.6 CONSENTS AND APPROVALS; NO VIOLATIONS.......................... 11
Section 3.7 ABSENCE OF CERTAIN CHANGES..................................... 11
Section 3.8 NO UNDISCLOSED LIABILITIES..................................... 11
Section 3.9 EMPLOYEE BENEFIT PLANS......................................... 12
Section 3.10 OTHER BENEFIT PLANS............................................ 13
Section 3.11 LITIGATION..................................................... 13
Section 3.12 COMPLIANCE WITH APPLICABLE LAW................................. 14
Section 3.13 BOARD ACTION................................................... 14
Section 3.14 ACCOUNTING MATTERS............................................. 14
Section 3.15 TAX RETURNS AND AUDITS......................................... 15
Section 3.16 MATERIAL CONTRACTS............................................. 15
Section 3.17 INSURANCE...................................................... 16
Section 3.18 SUBSIDIARIES................................................... 16
Section 3.19 REAL PROPERTY.................................................. 17
Section 3.20 ENVIRONMENTAL AND EMPLOYEE SAFETY MATTERS...................... 17
Section 3.21 INTELLECTUAL PROPERTY.......................................... 17
Section 3.22 TANGIBLE PERSONAL PROPERTY..................................... 20
Section 3.23 EMPLOYEES AND INDEPENDENT CONTRACTORS.......................... 20
Section 3.24 FINANCIAL STATEMENTS........................................... 21
Section 3.25 NOTES AND ACCOUNTS RECEIVABLE.................................. 22
Section 3.26 DISCLOSURE..................................................... 22
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Section 3.27 RESTRICTIVE COVENANTS......................................... 22
(a) NON-COMPETITION........................................... 22
(b) NON-SOLICITATION OF CUSTOMERS............................. 23
(c) NO EMPLOYMENT OR SOLICITATION OF EMPLOYEES AND
CONSULTANTS............................................... 23
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF IMR AND THE COMPANY.......................... 23
Section 4.1 ORGANIZATION................................................... 23
Section 4.2 ISSUANCE OF IMR COMMON STOCK................................... 24
Section 4.3 AUTHORITY...................................................... 24
Section 4.4 SEC REPORTS AND FINANCIAL STATEMENTS........................... 24
Section 4.5 INTERIM OPERATIONS OF THE COMPANY.............................. 25
Section 4.6 ACCOUNTING MATTERS............................................. 25
Section 4.7 CONSENTS AND APPROVALS: NO VIOLATIONS......................... 25
Section 4.8 CAPITALIZATION................................................. 26
ARTICLE V
ADDITIONAL AGREEMENTS.......................... 26
Section 5.1 RESTRICTED SHARES.............................................. 26
Section 5.2 DEMAND REGISTRATION RIGHTS..................................... 27
Section 5.3 CONDITIONS TO REGISTRATION..................................... 27
Section 5.4 REGISTRATION PROCEDURES........................................ 29
Section 5.5 POOLING OF INTERESTS........................................... 30
Section 5.6 EXPENSES....................................................... 30
Section 5.7 BROKERS OR FINDERS............................................. 31
Section 5.8 ADDITIONAL AGREEMENTS.......................................... 31
Section 5.9 CONFIDENTIALITY/NON-DISCLOSURE................................. 31
ARTICLE VI
INDEMNIFICATION; SURVIVAL........................ 31
Section 6.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES..................... 31
Section 6.2 INDEMNIFICATION PROVISIONS FOR THE BENEFIT OF IMR.............. 31
Section 6.3 INDEMNIFICATION PROVISIONS FOR THE BENEFIT OF THE FUSION
SHAREHOLDERS................................................... 32
Section 6.4 MATTERS INVOLVING THIRD PARTIES................................ 32
Section 6.5 DETERMINATION OF ADVERSE CONSEQUENCES.......................... 33
Section 6.6 OTHER INDEMNIFICATION PROVISIONS............................... 33
ARTICLE VII
ADDITIONAL DELIVERIES.......................... 34
Section 7.1 ADDITIONAL DELIVERIES AT THE TIME OF EXECUTION OF THIS
AGREEMENT...................................................... 34
(a) EMPLOYMENT AGREEMENTS..................................... 34
(b) CONSENTS UNDER FUSION OBLIGATIONS......................... 34
(c) LEGAL OPINION............................................. 34
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(d) LEGAL OPINION............................................. 34
ARTICLE VIII
APPOINTMENT OF REPRESENTATIVE...................... 35
Section 8.1 APPOINTMENT; AUTHORITY........................................ 35
Section 8.2 BINDING NATURE; NO INDEPENDENT ACTION......................... 35
Section 8.3 ACCEPTANCE OF APPOINTMENT..................................... 36
Section 8.4 COMPENSATION, EXPENSES, ETC................................... 36
Section 8.5 REPLACEMENT................................................... 36
Section 8.6 TERMINATION OF DUTIES......................................... 36
ARTICLE IX
MISCELLANEOUS.............................. 37
Section 9.1 NOTICES....................................................... 37
Section 9.2 INTERPRETATION................................................ 38
Section 9.3 COUNTERPARTS.................................................. 39
Section 9.4 ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES; RIGHTS OF
OWNERSHIP..................................................... 39
Section 9.5 GOVERNING LAW; ARBITRATION.................................... 39
Section 9.6 PUBLICITY..................................................... 39
Section 9.7 ASSIGNMENT.................................................... 39
Section 9.8 AMENDMENT..................................................... 40
Section 9.9 LANGUAGE...................................................... 40
Section 9.10 MATERIALITY OF REPRESENTATIONS AND WARRANTIES................. 40
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EXHIBITS
EXHIBIT 2.3(a) - Calculation of IMR Shares
EXHIBIT 2.3(b) - Form of Instructions to IMR's Transfer Agent
EXHIBIT 2.9 - Shareholder Certificate
EXHIBIT 3.1 - Fusion Shareholder List
EXHIBIT 3.4 - Shareholder Agreement
EXHIBIT 3.24 - Fusion Financial Statements
EXHIBIT 5.7 - Brokers' or Finders' Fees
EXHIBIT 7.1(a) - Form of Employment Agreement
SCHEDULES
Schedule 3.3 - Fusion Organization
Schedule 3.6 - Fusion Consents and Approvals; No Violations
Schedule 3.9 - Fusion Employee Benefits Plan
Schedule 3.10 - Fusion Other Benefit Plans
Schedule 3.11 - Fusion Litigation
Schedule 3.12 - Fusion Compliance with Applicable Law
Schedule 3.15 - Fusion Tax Returns and Audits
Schedule 3.16 - Fusion Material Contracts
Schedule 3.17 - Fusion Insurance
Schedule 3.18 - Fusion Subsidiaries
Schedule 3.19 - Fusion Real Property
Schedule 3.20 - Fusion Environmental and Employee Safety Matters
Schedule 3.21 - Fusion Intellectual Property
Schedule 3.23 - Fusion Employees and Independent Contractors
Schedule 3.24 - Fusion Financial Statements
Schedule 3.25 - Fusion Notes and Accounts Receivable
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ACQUISITION AGREEMENT
This ACQUISITION AGREEMENT (the "Agreement"), dated as of March 26,
1999, by and among IMRglobal Corp., formerly Information Management Resources,
Inc., a Florida corporation ("IMR"), IMR Sub AB Corp., a Florida corporation,
which is an indirect wholly-owned subsidiary of IMR (the "Company"), Fusion
System Japan Co., Ltd., a Japanese corporation (Kabushiki Kaisha) ("Fusion"),
and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ("Alfant"), ▇▇▇▇▇ ▇▇▇▇▇▇ ("Umylny"), ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
("Ribble"), ▇▇▇ ▇. ▇▇▇▇ ("▇▇▇▇"), ▇▇▇▇▇ ▇▇▇▇▇▇ ("▇▇▇▇▇▇"), ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
("▇▇▇▇▇▇▇"), ▇▇▇ ▇▇▇▇▇▇ ("▇▇▇▇▇▇"), ▇▇▇▇ ▇▇▇▇▇ ("▇▇▇▇▇"), ▇▇▇▇ ▇▇▇▇▇▇
("▇▇▇▇▇▇"), ▇▇▇▇▇ ▇▇▇▇▇▇▇ ("English"), ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇"), ▇▇▇ ▇▇▇▇▇▇▇
("▇▇▇▇▇▇▇"), ▇▇▇▇ ▇▇▇▇▇ ("▇▇▇▇▇"), ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ("▇▇▇▇▇▇"), ▇▇▇▇▇ ▇. ▇▇▇▇▇
("▇▇▇▇▇"), ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇▇") and Mami Alfant ("Ma. Alfant")
(collectively, the "Fusion Shareholders"). Alfant, Umylny, Ribble, Chun, Trehan,
Gaboury, Rogers, Hyman, Tucker, English, Howells, Gardner, Fujii, Siegel, ▇▇▇▇▇
and Wolfthal are sometimes collectively referred to as the "Management
Shareholders".
BACKGROUND
The Boards of Directors of IMR, the Company and Fusion, and the Fusion
Shareholders deem it advisable and in their best interests to consummate, and
have approved, the business combination transaction provided for in this
Agreement, pursuant to which the Company will acquire 100% of the outstanding
capital stock of Fusion from the Fusion Shareholders, and the Fusion
Shareholders will transfer to the Company all of their Fusion Stock in return
for shares of IMR Common Stock (the "Acquisition"). For accounting purposes, it
is intended that this Acquisition shall be accounted for as a "pooling of
interests." Accordingly, in consideration of the mutual representations,
warranties, covenants, and agreements set forth below, the parties to this
Agreement agree as follows:
TERMS
ARTICLE I
DEFINITIONS
Section 1.1 DEFINITIONS. When used in this Agreement, the following
terms shall have the meanings specified below, which apply to both the singular
and the plural forms of such terms:
"ACQUISITION" has the meaning set forth in the Background section of
this Agreement.
"ADVERSE CONSEQUENCES" means all actual assessments, levies, losses,
fines, penalties, obligations, payments, judgments, Liabilities, damages, costs
and expenses, including attorneys', accountants', investigators', and experts'
fees and expenses.
Adverse Consequences shall not include any punitive, special or consequential
damages that may be awarded in any lawsuit against a party to this Agreement in
favor of another party to this Agreement, but shall include any punitive,
special or consequential damages awarded to any third party.
"AFFILIATE" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Exchange Act.
"AGREEMENT" has the meaning set forth in the preface of this Agreement.
"ALFANT" has the meaning set forth in the preface of this Agreement.
"CERTIFICATES" has the meaning set forth in Section 2.3(a).
"CHUN" has the meaning set forth in the preface of this Agreement.
"CLOSING" has the meaning set forth in Section 2.2.
"CLOSING DATE" has the meaning set forth in Section 2.2.
"CODE" means the United States Internal Revenue Code of 1986, as
amended.
"COMPANY" has the meaning set forth in the Preface to this Agreement.
"CONFIDENTIAL INFORMATION" means any information concerning the
operations, businesses and affairs of any of the parties to this Agreement, as
the context may require, that is not already generally available to the public.
Without limiting the foregoing, "Confidential Information" shall include
marketing and sales information, customer and account lists and pricing
information, internal forecasts and projections, employee information and
product development information.
"CONSIDERATION SHARES" has the meaning set forth in Section 2.3(b).
"ENGLISH" has the meaning set forth in the preface of this Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"FBCA" means the Florida Business Corporation Act, as amended.
"FUJII" has the meaning set forth in the preface of this Agreement.
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"FUSION" has the meaning set forth in the preface to this Agreement.
"FUSION BENEFIT PLANS" has the meaning set forth in Section 3.9(a).
"FUSION CONTRACTS" has the meaning set forth in Section 3.16.
"FUSION ERISA PLANS" has the meaning set forth in Section 3.9(a).
"FUSION FINANCIAL STATEMENTS" has the meaning set forth in Section
3.24.
"FUSION HARDWARE" has the meaning set forth in Section 3.21(b)(v).
"FUSION PERMITS" has the meaning set forth in Section 3.12.
"FUSION SHAREHOLDER MAXIMUM AMOUNT" shall mean as to each Fusion
Shareholder: (a) 74% of all proceeds received by such Fusion Shareholder from
any bona fide sale to any third party of all or part of the Consideration
Shares, (b) 74% of all Consideration Shares still held by such Fusion
Shareholder at the time of the resolution of the claim (valued at the then
current Market Price), and (c) 74% of the cash value of the Consideration Shares
transferred other than through a bona fide sale to a third party, valued at the
time of the claim made by IMR.
"FUSION SHAREHOLDERS" has the meaning set forth in the preface of this
Agreement.
"FUSION SOFTWARE" has the meaning set forth in Section 3.21(b)(i).
"FUSION STOCK" means shares of ordinary stock, par value (Yen) 50,000
per share, of Fusion.
"GAAP" means United States Generally Accepted Accounting Principles.
"▇▇▇▇▇▇▇" has the meaning set forth in the preface of this Agreement.
"▇▇▇▇▇▇▇" has the meaning set forth in the preface of this Agreement.
"GOVERNMENTAL ENTITY" has the meaning set forth in Section 3.6.
"▇▇▇▇▇▇▇" has the meaning set forth in the preface of this Agreement.
"▇▇▇▇▇" has the meaning set forth in the preface of this Agreement.
"IMR" has the meaning set forth in the preface of this Agreement.
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"IMR COMMON STOCK" means shares of common stock, par value $0.10 per
share, of IMR.
"IMR MAXIMUM AMOUNT" shall mean 74% of the value of the Consideration
Shares at the time of the claim made by the Fusion Shareholders.
"IMR SEC DOCUMENTS" has the meaning set forth in Section 4.4.
"INDEMNIFIED PARTY" has the meaning set forth in Section 6.4(a).
"INDEMNIFYING PARTY" has the meaning set forth in Section 6.4(a).
"INTELLECTUAL PROPERTY" has the meaning set forth in Section
3.21(a)(ii).
"IRS" means the United States Internal Revenue Service.
"JCC" means the Japanese Commercial Code (Shoho), Law No. 48 of 1899,
as amended.
"JGAAP" means Japanese Generally Accepted Accounting Principles.
"JSEL" means the Japanese Securities and Exchange Law
(Shokentorihikihos), Law No. 25 of 1948.
"JSTL" means the Japanese Transaction Tax Law, Law No. 102 of 1953, as
amended.
"KNOWLEDGE" with respect to an entity means the actual knowledge, after
reasonable investigation, of the executive officers and/or directors of the
entity and, with respect to any natural person, means the actual knowledge of
such person after reasonable investigation in a manner consistent with the level
of responsibility within Fusion of the person and the satisfaction of that
responsibility in the Ordinary Course of Business of Fusion.
"LIABILITY" means any liability (whether known or unknown, whether
asserted or unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or to become
due), including any liability for Taxes.
"LICENSE AGREEMENTS" has the meaning set forth in Section 3.21(b)(ii).
"LICENSED INTELLECTUAL PROPERTY" has the meaning set forth in Section
3.21(a)(ii).
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"LICENSED SOFTWARE" has the meaning set forth in Section 3.21(b)(i).
"MA. ALFANT" has the meaning set forth in the preface of this
Agreement.
"MANAGEMENT SHAREHOLDERS" has the meaning set forth in the preface of
this Agreement.
"MATERIAL ADVERSE EFFECT" means such event, change, or effect is
materially adverse to the consolidated condition (financial or otherwise),
properties, assets (including intangible assets), liabilities (including
contingent liabilities), businesses, or results of operations of such entity
(or, if with respect thereto, of such group of entities taken as a whole), but
not including those adverse effects occurring as a result of general economic or
financial conditions which generally affect other persons who participate or are
engaged in lines of business in which the applicable entity participates or is
engaged.
"MOST RECENT FINANCIAL STATEMENTS" has the meaning set forth in Section
3.24.
"NASDAQ" means the Nasdaq Stock Market, Inc.'s National Market.
"NTAA" means the National Tax Administrative Agency of Japan.
"ORDINARY COURSE OF BUSINESS" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).
"PERSON" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization, or a governmental entity (or any department, agency, or political
subdivision thereof).
"PROCESSES" has the meaning set forth in Section 3.21(b)(vi).
"PROPRIETARY INTELLECTUAL PROPERTY" has the meaning set forth in
Section 3.21(a)(i).
"PROPRIETARY SOFTWARE" has the meaning set forth in Section 3.21(b)(i).
"REPRESENTATIVE" has the meaning set forth in Section 8.1.
"REGISTRABLE SHARES" has the meaning set forth in Section 5.2.
"REQUESTING SHAREHOLDERS" has the meaning set forth in Section 5.2.
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"RIBBLE" has the meaning set forth in the preface of this Agreement.
"▇▇▇▇▇▇" has the meaning set forth in the preface of this Agreement.
"SEC" means the United States Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"▇▇▇▇▇▇" has the meaning set forth in the preface of this Agreement.
"SHAREHOLDER CERTIFICATE" has the meaning set forth in Section 2.10.
"SUBSIDIARY" means, with respect to any party, any corporation, or
other entity, whether incorporated or unincorporated, of which (i) such party or
any other Subsidiary of such party is a general partner (excluding partnerships
whose general partnership interests held by such party or any Subsidiary of such
party do not have a majority of the voting interest in such partnership) or (ii)
at least a majority of the securities or other interests having by their terms
ordinary voting power to elect a majority of the Board of Directors or others
performing similar functions with respect to such corporation or other entity is
directly or indirectly owned or controlled by such party or by any one or more
of its Subsidiaries.
"TAX RETURN" means any return, declaration, report, claim for refund,
or information return or statement relating to Taxes whether required to be
filed with the IRS, the NTAA, or any other Governmental Entity, including any
schedule or attachment thereto, and including any amendment thereof.
"TAX" means any United States, Japanese, or other federal, state,
local, or foreign income, corporate gross receipts, license, payroll,
employment, excise, severance, stamp, occupation, premium, consumption windfall
profits, environmental (including taxes under Code ss. 59A), customs duties,
capital stock, franchise, profits, withholding, social security (or similar),
unemployment, disability, real property, personal property, sales, use,
transfer, registration, value added, alternative or add-on minimum, estimated,
or other tax of any kind whatsoever, including any interest, penalty, or
addition thereto, whether disputed or not.
"THIRD PARTY CLAIM" has the meaning set forth in Section 6.4(a).
"▇▇▇▇▇▇" has the meaning set forth in the preface of this Agreement.
"▇▇▇▇▇▇" has the meaning set forth in the preface of this Agreement.
"UMYLNY" has the meaning set forth in the preface of this Agreement.
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"VOTING DEBT" has the meaning set forth in Section 3.4.
"▇▇▇▇▇" has the meaning set forth in the preface of this Agreement.
"WOLFTHAL" has the meaning set forth in the preface of this Agreement.
"YEAR 2000 COMPLIANT" has the meaning set forth in Section 3.21(b)(vi).
ARTICLE II
THE ACQUISITION
Section 2.1 BASIC TRANSACTION. Subject to the provisions of this
Agreement, the Company agrees to acquire from the Fusion Shareholders, and the
Fusion Shareholders agree to transfer to the Company, all of their Fusion Stock
for the consideration specified below.
Section 2.2 CLOSING. The closing of the transactions contemplated by
this Agreement (the "Closing") will take place simultaneously upon execution of
this Agreement at 10:00 a.m. (Tokyo time) on March 26, 1999 or such other date
as the parties may specify in writing, at the offices of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
LLP, AIG Building 7th Floor, ▇-▇-▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇-▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇,
unless another date or place is agreed to in writing by the parties. The date on
which the Closing occurs is sometimes referred to in this Agreement as the
"Closing Date."
Section 2.3 DELIVERIES AT THE CLOSING; EXCHANGE OF SHARES. (a) At the
Closing, the Representative, pursuant to powers of attorney from each Fusion
Shareholder, and acting as the attorney-in-fact for all of the Fusion
Shareholders, with full power and authority to execute all documents and take
such further actions as required on behalf of each such Fusion Shareholder and
receive the rights and benefits according to the Fusion Shareholders pursuant to
this Agreement, will deliver to the Company each Fusion Shareholder's
certificate or certificates (which shall, if required for transfer, be endorsed
in blank or accompanied by duly executed assignment documents) that represent
outstanding shares of Fusion Stock (the "Certificates").
(b) In return for the delivery of the Certificates by the
Representative, each Fusion Shareholder will be entitled to receive such number
of shares of IMR Common Stock as set forth on the attached Exhibit 2.3(a) (the
"Consideration Shares"). The calculation of the number of shares of IMR Common
Stock to be issued to each Fusion Shareholder shall be attached to this
Agreement as Exhibit 2.3(a) and signed by IMR and a representative of the Fusion
Shareholders. At the Closing, IMR will deliver irrevocable instructions, in the
form attached to this Agreement as Exhibit 2.3(b), to its transfer agent, with a
copy to the Representative, to deliver the Consideration Shares to the
Representative.
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Section 2.4 NO FURTHER OWNERSHIP RIGHTS IN FUSION STOCK. The
Consideration Shares issued in exchange for shares of Fusion Stock in accordance
with the terms of this Agreement shall be deemed to have been issued in full
satisfaction of all rights pertaining to such shares of Fusion Stock.
Section 2.5 TAXES. Japanese securities transaction Taxes payable
pursuant to the JSTL to be imposed on the transfer of the Fusion Stock from the
Fusion Shareholders to the Company shall be the sole responsibility and
obligation of the Company. Each party shall be responsible for paying all income
taxes payable by such party as a result of the transactions contemplated by this
Agreement.
Section 2.6 NO FRACTIONAL SHARES. No certificate or scrip representing
fractional shares of IMR Common Stock shall be issued and no cash will be paid
in lieu of fractional shares. Instead, any fractional amount due to a Fusion
Shareholder based on the exchange contemplated by Section 2.3 will be rounded up
to the next number of whole shares of IMR Common Stock.
Section 2.7 LOST, STOLEN OR DESTROYED CERTIFICATES. In the event any
Certificate shall have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the Person claiming such Certificate to be lost,
stolen or destroyed and, if required by IMR and the Company, the posting by such
Person of a bond in customary amount as indemnity against any claim that may be
made against IMR with respect to such Certificate, IMR will, in exchange for
such lost, stolen or destroyed Certificate, deliver the Consideration Shares
contemplated by this Article II.
Section 2.8 CERTAIN ADJUSTMENTS. If between the date of this Agreement
and the Closing, the outstanding shares of Fusion Stock or of IMR Common Stock
are changed into a different number of shares by reason of any reclassification,
recapitalization, split-up, combination, or exchange of shares, or any dividend
payable in stock or other securities shall be declared on outstanding shares of
Fusion Stock or IMR Common Stock with a record date within such period, the
number of Consideration Shares payable pursuant to Section 2.3 shall be adjusted
accordingly to provide to the holders of Fusion Stock and IMR Common Stock the
same economic effect as contemplated by this Agreement prior to such
reclassification, recapitalization, split-up, combination, exchange, or
dividend.
Section 2.9 PRIVATE PLACEMENT. It is the intention of the parties that
the Consideration Shares will be exempt from the registration requirements of
the Securities Act pursuant to an exemption, provided by Rule 506 of Regulation
D and/or Regulation S promulgated under the Securities Act and/or Section 4(2)
of the Securities Act, and applicable state securities laws. IMR has taken (or
will take prior to the Closing) all actions required to qualify the issuance of
the Consideration Shares for such exemptions and Fusion and the Fusion
Shareholders have delivered all documents (including but not limited to the
Shareholder Certificate in substantially the form
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attached as Exhibit 2.9 (the "Shareholder Certificate")) reasonably requested by
IMR in connection therewith and shall otherwise fully cooperate with IMR to
ensure compliance with such laws.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE
FUSION SHAREHOLDERS AND FUSION
Each of the Fusion Shareholders and Fusion, jointly and severally,
represents and warrants to IMR and the Company as follows:
Section 3.1 TITLE TO FUSION STOCK. Each Fusion Shareholder owns and
holds good and valid title to the Fusion Stock transferred by him or her to the
Company, free and clear of any liens, security interests, restrictions, options
or encumbrances. Each Fusion Shareholder has the sole right to transfer such
shares of Fusion Stock to the Company pursuant to this Agreement, and upon
delivery of such shares pursuant to this Agreement, good and valid title to such
shares, free and clear of any liens, security interests, restrictions, options
or encumbrances will be transferred to the Company. The number of shares of
Fusion Stock held by each Fusion Shareholder is listed in Exhibit 3.1. Except as
set forth in Exhibit 3.1, the right of the Representative to deliver and
transfer the shares of Fusion Stock held by the Fusion Shareholders pursuant to
the terms and conditions of this Agreement, and the requirement that Fusion's
board of directors consent to the transfer under Fusion's articles of
incorporation (which will be satisfied at the Closing), the Fusion Shareholder's
shares of Fusion Stock are not subject to any right of first refusal or other
restriction, no other Person has any interest or right in such shares of Fusion
Stock, and to the Fusion Shareholder's Knowledge, such shares of Fusion Stock
are being transferred to the Company in compliance with all applicable Japanese
laws. No Fusion Shareholder has any other equity interest or right to acquire an
equity interest in Fusion other than such shares of Fusion Stock.
Section 3.2 POWER AND AUTHORITY OF FUSION SHAREHOLDERS. Each Fusion
Shareholder has the right, power, legal capacity and authority to enter into and
perform its obligations under this Agreement. No filing, authorization or
approval, governmental or otherwise, is necessary to enable such Fusion
Shareholder to enter into, and to perform his or her obligations under this
Agreement. This Agreement constitutes a valid and binding obligations of the
Fusion Shareholders enforceable against the Fusion Shareholders in accordance
with its terms, subject to the laws of general application relating to
bankruptcy, insolvency, and the relief of debtors and to the rules of law
governing specific performance, injunctive relief and other equitable remedies.
Section 3.3 ORGANIZATION. Each of Fusion and its Subsidiaries is a
corporation duly organized, validly existing, and (where applicable) with active
status or good
9
standing under the laws of the jurisdiction of its incorporation and has all
requisite corporate power and authority and all necessary governmental approvals
to own, lease, and operate its properties and to carry on its business as now
being conducted, except where the failure to be so organized, existing, and
(where applicable) in good standing or with active status, or to have such
power, authority, and governmental approvals would not have a Material Adverse
Effect on Fusion and its Subsidiaries taken as a whole. Fusion and each of its
Subsidiaries is duly qualified or licensed to do business and (where applicable)
is in good standing or with active status in each jurisdiction in which the
property owned, leased, or operated by it or the nature of the business
conducted by it makes such qualification or licensing necessary, except where
the failure to be so duly qualified or licensed and be in good standing would
not in the aggregate have a Material Adverse Effect on Fusion and its
Subsidiaries taken as a whole.
Section 3.4 CAPITALIZATION. As of the date of this Agreement, the
authorized capital stock of Fusion consists of 800 shares of Fusion Stock of
which, as of the date of this Agreement, 405.66 shares were issued and
outstanding, and all of the issued and outstanding shares of Fusion Stock are,
duly authorized, validly issued, fully paid and nonassessable, and, except as
set forth in Exhibit 3.4, free of any preemptive rights. As of the date of this
Agreement, no bonds, debentures, notes, or other indebtedness having the right
to vote (or convertible into securities having the right to vote) ("Voting
Debt") of Fusion are issued or outstanding. Except as set forth in the
Shareholder Agreement attached to this Agreement as Exhibit 3.4, which will
terminate effective as of the Closing, there are no existing options, warrants,
calls, subscriptions, or other rights, agreements, or commitments of any
character relating to the issued or unissued capital stock or Voting Debt of
Fusion or any of its Subsidiaries, or obligating Fusion or any of its
Subsidiaries to issue, transfer, or cause to be issued, transferred, or sold any
shares of capital stock or Voting Debt of, or other equity interests in, Fusion
or of any of its Subsidiaries, or securities convertible into or exchangeable
for such shares or equity interests or obligating Fusion or any of its
Subsidiaries to grant, extend, or enter into any such option, warrant, call,
subscription or other right, agreement, or commitment. There are no outstanding
contractual obligations of Fusion or any of its Subsidiaries to reacquire,
redeem, or otherwise acquire any shares of capital stock of Fusion or any of its
Subsidiaries. All of the issued and outstanding shares of Fusion Stock are held
of record and owned by the Fusion Shareholders in the respective amounts set
forth in Exhibit 3.1. Fusion has not authorized or issued any shares of
preferred stock or any capital stock other than the Fusion Stock.
Section 3.5 AUTHORITY. Fusion has the requisite corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated by this Agreement. The execution, delivery, and
performance of this Agreement and the consummation of the Acquisition and of the
other transactions contemplated by this Agreement have been duly authorized by
all necessary corporate action on the part of Fusion, and no other corporate
proceedings on the part of Fusion are necessary to authorize the execution and
delivery of this Agreement or to
10
consummate the transactions so contemplated. This Agreement has been duly
executed and delivered by Fusion and, assuming this Agreement constitutes a
valid and binding obligation of IMR and the Company, respectively, constitutes a
valid and binding obligation of Fusion, enforceable against Fusion in accordance
with its terms, subject to the laws of general application relating to
bankruptcy, insolvency, and the relief of debtors and to the rules of law
governing specific performance, injunctive relief or other equitable remedies.
Section 3.6 CONSENTS AND APPROVALS; NO VIOLATIONS. Except as set forth
in Exhibit 3.6, and except for filings, permits, authorizations, consents, and
approvals as may be required under, and other applicable requirements of, the
JSEL, the JCC, or the laws of other jurisdictions in which Fusion is qualified
to do or is doing business, neither the execution, delivery, or performance of
this Agreement by Fusion, nor the consummation by Fusion of the transactions
contemplated by this Agreement, nor compliance by Fusion with any of the
provisions of this Agreement will (a) conflict with or result in any breach of
any provision of the articles of incorporation or the bylaws of Fusion or of any
of its Subsidiaries, (b) require any filing with, or authorization, consent,
permit, or approval of, any court, arbitral tribunal, administrative agency or
commission, or other governmental or other regulatory authority or agency
whether in Japan, the United States or elsewhere (a "Governmental Entity"),
except where the failure to obtain such authorizations, consents, permits, or
approvals or to make such filings, would not have a Material Adverse Effect on
Fusion and its Subsidiaries taken as a whole, (c) result in a violation or
breach of, or constitute (with or without notice or lapse of time or both) a
default (or give rise to any right of termination, amendment, cancellation, or
acceleration) under, any of the terms, conditions, or provisions of any note,
bond, mortgage, indenture, lease, license, contract, agreement, or other
instrument or obligation to which Fusion or any of its Subsidiaries is a party
or by which any of them or any of their properties or assets may be bound, or
(d) violate any order, writ, injunction, decree, statute, rule, or regulation
applicable to Fusion, any of its Subsidiaries, or any of their properties or
assets, except as they relate to (c) or (d), for violations, breaches, or
defaults that would not, individually or in the aggregate, have a Material
Adverse Effect on Fusion and its Subsidiaries taken as a whole. The consummation
of the Acquisition will not require the consent of any third party except where
the failure to obtain such consent would not have a Material Adverse Effect,
either individually or in the aggregate, upon Fusion and its Subsidiaries taken
as a whole.
Section 3.7 ABSENCE OF CERTAIN CHANGES. Since December 31, 1998, there
have been no events, changes, or effects relating to the Fusion Financial
Statements that would have, individually or in the aggregate, a Material Adverse
Effect on Fusion and its Subsidiaries taken as a whole.
Section 3.8 NO UNDISCLOSED LIABILITIES. Since December 31, 1998,
neither Fusion nor any of its Subsidiaries has incurred any Liabilities that
were not reflected on a
11
consolidated balance sheet of Fusion and its Subsidiaries (including the notes
to the balance sheet), except for Liabilities arising in the Ordinary Course of
Business. Since December 31, 1998, neither Fusion nor any of its Subsidiaries
has incurred any Liabilities that would reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on Fusion and its
Subsidiaries taken as a whole.
Section 3.9 EMPLOYEE BENEFIT PLANS. (a) Schedule 3.9 contains a
complete and accurate list of each pension, retirement, profit sharing, deferred
compensation, stock option, stock purchase, bonus, medical, welfare, disability,
severance or termination pay, insurance or incentive plan, and each other
employee benefit plan, program, agreement or arrangement, whether funded or
unfunded, sponsored, maintained or contributed to or required to be contributed
to by Fusion or any of its Subsidiaries, for the benefit of any employee or
terminated employee of Fusion or any Fusion ERISA Affiliate (the "Fusion Benefit
Plans"). Schedule 3.9 identifies each Fusion Benefit Plan that is an "employee
benefit plan," within the meaning of Section 3(3) of ERISA (the "Fusion ERISA
Plans").
(b) Except as disclosed in Schedule 3.9, Fusion has furnished
to IMR complete and accurate copies of each of the Fusion Benefit Plans and
related trusts (if any), the most recent financial statement and the most recent
actuarial report (if any) prepared with respect to any of such Fusion Benefit
Plan that is funded, the most recent IRS determination letter (if any), the most
recent summary plan description and the three most recent Form 5500 or Form
5500-C/R annual reports (if any).
(c) All contributions required by each Fusion Benefit Plan or
by law with respect to all periods through the Closing shall have been made by
such date (or provided for by Fusion by adequate reserves on the Fusion
Financial Statements) and no excise or other Taxes have been incurred or are due
and owing with respect to Fusion Benefit Plan because of any failure to comply
with the minimum funding standards of ERISA and the Code.
(d) Fusion or a Subsidiary of Fusion has made all
contributions and payments to the Fusion Benefit Plans, or amounts have been
accrued and reserved for such payments, as are required of Fusion or its
Subsidiaries in accordance with the terms of such plans. Except as set forth in
such actuarial reports, no Fusion Benefit Plan has any accumulated funding
deficiency and the assets of the fund created under such plan are at least equal
to the vested interest of the participants in such fund; all reports and
disclosures relating to each of the Fusion Benefit Plans required to be filed or
distributed have been or will be filed or distributed in substantial compliance
with applicable law.
(e) No claim (other than a routine claim for benefits),
lawsuit, arbitration, or other action relating to a Fusion Benefit Plan has been
threatened,
12
asserted, or instituted against any Fusion Benefit Plan, or, to the Knowledge of
the Fusion Shareholders, against any trustee or fiduciaries of any Fusion
Benefit Plan, Fusion, or any of the assets of any trust maintained under any
Fusion Benefit Plan.
(f) All required information filings for each Fusion Benefit
Plan have been timely filed.
(g) Neither Fusion nor any of its Subsidiaries maintains a
Fusion Benefit Plan that is subject to Title IV of ERISA.
(h) Except as set forth in Schedule 3.9, neither Fusion nor
any of its Subsidiaries currently maintains or contributes to any severance pay
plan.
(i) Except as set forth in Schedule 3.9, no individual shall
accrue or receive any additional benefits, service, or accelerated rights to
payment of benefits under any Fusion Benefit Plan as a result of the actions
contemplated by this Agreement;
(j) Except as set forth in Schedule 3.9, Fusion and the Fusion
Shareholders represent that all of Fusion's employees in Japan are either
citizens of Japan or possess the proper Visa or work permit necessary to perform
their duties on behalf of Fusion, except to the extent that the failure of any
employee to be a citizen or to possess a proper Visa would not have a Material
Adverse Effect on Fusion and its Subsidiaries taken as a whole.
Section 3.10 OTHER BENEFIT PLANS. Except as set forth in Schedule 3.10
and except as provided for in this Agreement, as of the date of this Agreement
neither Fusion nor any of its Subsidiaries is a party to any oral or written (a)
consulting agreement not terminable on 60 days or less notice involving the
payment of more than $25,000 per year, (b) union or collective bargaining
agreement, (c) agreement with any executive officer or other key employee of
Fusion or any of its Subsidiaries providing for contingent benefits or the
alteration of terms, based upon the occurrence of a transaction involving Fusion
of the nature contemplated by this Agreement, or agreement with any executive
officer of Fusion providing any term of employment or compensation guarantee
extending for a period longer than one year and for payment in excess of $25,000
per year, or (d) agreement or plan, including any stock option plan, stock
appreciation right plan, restricted stock plan, or stock purchase plan,
providing for increased benefits or the accelerated vesting of the benefits on
the occurrence of any of the transactions contemplated by this Agreement, or the
calculation of the value of any of the benefits on the basis of any of the
transactions contemplated by this Agreement.
Section 3.11 LITIGATION. Except as set forth in Schedule 3.11, there is
no suit, claim, action, proceeding, or investigation pending or, to the
Knowledge of Fusion,
13
threatened against, Fusion or any of its Subsidiaries before any Governmental
Entity. Except as disclosed in Schedule 3.11, neither Fusion nor any of its
Subsidiaries is subject to any outstanding order, writ, injunction, or decree
that, insofar as can be reasonably foreseen, individually or in the aggregate,
in the future would have a Material Adverse Effect on Fusion and its
Subsidiaries taken as a whole, or would prevent Fusion from consummating the
transactions contemplated by this Agreement. Except as set forth on Schedule
3.11 and except for rights granted under this Agreement, to Fusion's Knowledge,
there is no basis for any Person to assert a claim against Fusion or the Fusion
Shareholders based upon: (a) ownership or rights to ownership of any shares of
Fusion Stock or (b) any rights as a Fusion securities holder, including without
limitation, any option or other right to acquire any Fusion securities, any
preemptive rights or any rights to notice or to vote.
Section 3.12 COMPLIANCE WITH APPLICABLE LAW. Fusion and its
Subsidiaries hold all permits, licenses, variances, exemptions, orders, and
approvals of all Governmental Entities necessary for the lawful conduct of their
respective businesses (the "Fusion Permits"), except where the failure to hold
such permits, licenses, variances, exemptions, orders, and approvals that would
not, individually or in the aggregate, have a Material Adverse Effect on Fusion
and its Subsidiaries taken as a whole. Fusion and its Subsidiaries are in
material compliance with the terms of the Fusion Permits, except where failure
to be in compliance therewith would not, individually or in the aggregate, have
a Material Adverse Effect on Fusion and its Subsidiaries, taken as a whole.
Except as set forth in Schedule 3.12, the businesses of Fusion and its
Subsidiaries are in material compliance with all laws, ordinances, and
regulations of any Governmental Entity, including, without limitation: (a) all
applicable securities laws and regulations, (b) all applicable national,
prefecture and local laws, ordinances and regulations, and all orders, writs,
injunctions, awards, judgments and decrees, pertaining to (i) the sale,
licensing, leasing, ownership or management of Fusion's owned, leased or
licensed real or personal property, products or technical data, and (ii) safety,
health, fire prevention, environmental protection, and similar matters, (c)
applicable Japanese export regulations and (d) all applicable foreign exchange
control laws, except where failure to be in compliance therewith would not,
individually or in the aggregate, have a Material Adverse Effect on Fusion and
its Subsidiaries, taken as a whole, and no investigation or review by any
Governmental Entity with respect to Fusion or any of its Subsidiaries is pending
or, to the Knowledge of Fusion, threatened.
Section 3.13 BOARD ACTION. The Board of Directors of Fusion has
determined that the transactions contemplated by this Agreement are in the best
interests of Fusion and the Fusion Shareholders.
Section 3.14 ACCOUNTING MATTERS. To the Knowledge of Fusion and the
Fusion Shareholders, neither Fusion nor any of its affiliates has through the
date of this Agreement taken or agreed to take any action that would affect the
ability of IMR to
14
account for the business combination to be effected by the Acquisition as a
"pooling of interests."
Section 3.15 TAX RETURNS AND AUDITS. Except as set forth in Schedule
3.15, Fusion and each of its Subsidiaries has duly filed all Tax Returns
required to be filed by it, has correctly reflected the taxable income required
to be shown on such Tax Returns, and has duly paid or made adequate provision
for the payment of all Taxes, including payroll Taxes, that have been incurred
or are due and payable pursuant to such returns or pursuant to any assessment
with respect to Taxes in such jurisdictions, whether or not in connection with
such Tax Returns. All Tax Returns listed in Schedule 3.15 have been filed on or
before the Closing Date to the extent such Tax Returns are required to be filed
on or before the Closing Date. There are no ongoing or, to the Knowledge of
Fusion and the Fusion Shareholders, threatened Tax audits relating to the Taxes.
There are no circumstances or pending questions relating to potential Tax
Liabilities or claims asserted for Taxes or assessments of Fusion or any of its
Subsidiaries that, if adversely determined, would be reasonably likely to result
in a Tax Liability that would have a Material Adverse Effect on Fusion and its
Subsidiaries taken as a whole for any period prior to, including, or beginning
after the Closing or in a change in Fusion's present practices in computing or
reporting Taxes. Except as set forth in Schedule 3.15, Fusion's Tax Returns or
Tax Liabilities have not been audited by any Tax agency or authority since
January 1, 1994.
Section 3.16 MATERIAL CONTRACTS. Schedule 3.16 lists the following
contracts, agreements, and written arrangements to which Fusion or any of its
Subsidiaries is a party:
(a) Any written agreement concerning a partnership or joint
venture;
(b) Any written arrangement concerning noncompetition;
(c) Any written arrangement between Fusion or any of its
Subsidiaries and any of their respective officers, directors, employees
(excluding standard employment, non-competition and confidentiality agreements
executed by all employees), or Affiliates;
(d) Any written arrangement under which the consequences of a
default or termination would be reasonably likely to have a Material Adverse
Effect on Fusion and its Subsidiaries taken as a whole; or
(e) Any other written arrangement (or group of related
arrangements) either involving more than $50,000 or not entered into in the
Ordinary Course of Business.
15
To the Knowledge of Fusion and its Subsidiaries and the Fusion Shareholders, no
party to any contract listed in Schedule 3.16 has given any written notice that
it intends to terminate any such contract or any oral notice of termination that
Fusion or the Fusion Shareholders reasonably believe will result in termination
of any such contract based upon the past experience of Fusion. Without limiting
the foregoing, Fusion has delivered to IMR a correct and complete copy of each
written agreement or arrangement, as amended to date, listed in Schedule 3.16
(the "Fusion Contracts"). With respect to each Fusion Contract: (i) it is legal,
valid, binding, enforceable, and in full force and effect, assuming the other
parties to the Fusion Contract have duly executed and delivered such Fusion
Contract and had the necessary power and authority to enter into such Fusion
Contract when executed and delivered; (ii) it will continue to be legal, valid,
binding, and enforceable and in full force and effect on identical terms
following the Closing, assuming, if applicable, that required consents to
assignment are obtained; (iii) to Fusion's Knowledge, no event has occurred that
with notice or lapse of time or both would permit termination, modification, or
acceleration under such Fusion Contract; and (iv) to Fusion's Knowledge, no
party has repudiated any provision of such Fusion Contract. Neither Fusion nor
any of its Subsidiaries is a party to any oral contract, agreement, or other
arrangement that, if reduced to written form, would be required to be listed in
Schedule 3.16.
Section 3.17 INSURANCE. Schedule 3.17 sets forth and briefly describes
each insurance policy (including without limitation liability, property,
business risk, employee health, group life, key man, director/officer liability,
and bond insurance and surety arrangements) currently in effect to which Fusion
or any of its Subsidiaries is a party or pursuant to which it is a named
insured, or otherwise the beneficiary of coverage. Fusion has delivered or made
available to IMR a correct and complete copy of each such insurance policy. With
respect to each insurance policy currently in effect: (a) the policy is legal,
valid, binding, and enforceable and in full force and effect, assuming the other
parties to the policy have duly executed and delivered such policy and had the
necessary power and authority to enter into such policy when executed and
delivered; (b) the policy will continue to be legal, valid, binding, and
enforceable and in full force and effect on identical terms until the Closing;
(c) to Fusion's Knowledge, no event has occurred that, with notice or the lapse
of time or both, would constitute such a breach or default or permit
termination, modification, or acceleration under the policy; and (d) to Fusion's
Knowledge, no party to the policy has repudiated any provision of the policy.
Fusion has not received any written notification of a reservation of rights from
any of its insurers regarding any open claim.
Section 3.18 SUBSIDIARIES. Except as set forth in Schedule 3.18, Fusion
has no Subsidiaries and does not have an equity interest, direct or indirect, in
any corporation, partnership, limited liability company, joint venture or other
business entity and has no liabilities relating to any entity listed on Schedule
3.18. Except as set forth in Schedule 3.18, Fusion has never been a Subsidiary
of any corporation, partnership,
16
limited liability company, joint venture or other business entity. Fusion owns
all of the issued and outstanding shares of capital stock of each of its
Subsidiaries.
Section 3.19 REAL PROPERTY. Neither Fusion nor any of its Subsidiaries
own any real property. Schedule 3.19 lists all parcels of real property leased
by Fusion or its Subsidiaries. With respect to each parcel of leased real
property, the lease or sublease is legal, valid, binding, and enforceable, and
in full force and effect assuming the other parties to the lease have duly
executed and delivered such lease and had the necessary power and authority to
enter into such lease when executed and delivered. All facilities leased by
Fusion or its Subsidiaries have received all approvals of Governmental Entities
(including licenses and permits) required in connection with the occupancy or
operation of the real property, except where failure to have received such
approval would not, individually or in the aggregate, have a Material Adverse
Effect on Fusion and its Subsidiaries, taken as a whole.
Section 3.20 ENVIRONMENTAL AND EMPLOYEE SAFETY MATTERS. Except as set
forth in Schedule 3.20 or that would not have a Material Adverse Effect upon
Fusion and its Subsidiaries, taken as a whole, Fusion and its Subsidiaries have
complied with all laws (including rules and regulations thereunder) of all
federal, state, local, and foreign Governmental Entities concerning the
environment, public health and safety, and employee health and safety, and no
charge, complaint, action, suit, proceeding, hearing, investigation, claim,
demand, or notice has been filed or commenced against any of them alleging any
failure to comply with any such law or regulation. Neither Fusion nor any of its
Subsidiaries has any Liability, and, to Fusion's Knowledge, there is no basis
for such Liability, under any law (or rule or regulation under such law) of any
Governmental Entity, concerning release or threatened release of hazardous
substances or pollution or protection of the environment.
Section 3.21 INTELLECTUAL PROPERTY. (a) Schedule 3.21 sets forth a
complete list of (i) all trademarks, trade names (including all national and
state registrations pertaining to such trademarks and trade names) and
registered copyrights and registered service marks (or applications for such
registration), all patents and patent applications and all unregistered trade
names and service marks (material to the business of Fusion) owned by Fusion or
its Subsidiaries (collectively, the "Proprietary Intellectual Property") and
(ii) all patents, trademarks and trade names used by Fusion or its Subsidiaries
in their businesses which are material to their businesses and are used pursuant
to a license or other right granted by a third party (the "Licensed Intellectual
Property" and together with the Proprietary Intellectual Property, the
"Intellectual Property"). A complete list of all such licenses and agreements
with respect to the Licensed Intellectual Property is set forth in Schedule
3.21. Each of the national, state and other governmental registrations with any
country pertaining to the Proprietary Intellectual Property is valid and in full
force and effect, except where the failure to hold such governmental
registrations will not have a Material Adverse Effect on Fusion and its
Subsidiaries taken as a whole. Fusion or its Subsidiaries, as
17
applicable, owns, or has the right to use pursuant to valid and effective
agreements, all Intellectual Property, and the consummation of the Acquisition
will not adversely alter or impair any such rights. No claims are pending
against Fusion or its Subsidiaries, and, to the Knowledge of Fusion or the
Fusion Shareholders, there is no factual basis for such a claim by any person,
with respect to the use of any Intellectual Property or challenging or
questioning the validity or effectiveness of any license or agreement relating
to any Intellectual Property that would have a Material Adverse Effect on Fusion
and its Subsidiaries taken as a whole. The current use by Fusion or its
Subsidiaries of the Intellectual Property does not, to the Knowledge of Fusion
or the Fusion Shareholders, in any material respect infringe upon the rights of
any third party, including but not limited to any copyright, patent, trade
secret, trademark, service ▇▇▇▇, trade name, firm name, logo, trade dress, mask
work, moral right, other Intellectual Property right, right of privacy or right
in personal data of any person. Schedule 3.21 sets forth a list of all
jurisdictions in which Fusion or its Subsidiaries is operating under a trade
name, and each jurisdiction in which any such trade name is registered. To
Fusion's Knowledge, there are no potentially interfering patents, or any patent
applications of any third party, which could reasonably be expected to interfere
with the Fusion Intellectual Property rights.
(b) (i) Schedule 3.21 sets forth a complete list of: (A) all
software and associated documentation owned by Fusion which are material to its
business, other than custom-developed software developed for and assigned to a
Fusion customer (the "Proprietary Software"); (B) all software (other than
Proprietary Software and "shrink-wrap" software) used in connection with
Fusion's business and material thereto (the "Licensed Software" and together
with the Proprietary Software, the "Fusion Software"). Fusion and its
Subsidiaries are in possession of all technical and descriptive materials
necessary to operate the Fusion Software, except where the absence of such
materials would not have a Material Adverse Effect on Fusion and its
Subsidiaries taken as a whole. The Proprietary Software consists of (x) source
and object code embodied in magnetic media, and (y) all documentation and
manuals materially necessary to maintain, support or service such software,
including licenses to use compilers, assemblers, libraries and other aids. No
party, other than Fusion or its Subsidiaries, possesses any current or
contingent rights to the Proprietary Software.
(ii) Fusion and its Subsidiaries have a valid right,
title and interest in all Intellectual Property rights in the Proprietary
Software. Fusion has developed the Proprietary Software entirely through its own
efforts and for its own account or has acquired, prior to the date of this
Agreement, valid right, title and interest in the Proprietary Software and the
Proprietary Software is free and clear of all liens, claims and encumbrances.
Schedule 3.21 lists all parties other than Fusion's current employees who have
created any portion of, or otherwise have any rights in, the Proprietary
Software. Fusion has secured from all parties listed on Schedule 3.21 who have
created any portion of, or otherwise have any rights in, the Proprietary
Software valid and enforceable written assignments of any such Proprietary
Software
18
or other rights to Fusion and has provided copies of such assignments to IMR.
The use of the Licensed Software and the use and distribution of the Proprietary
Software does not breach any terms of any contract between Fusion and any third
party. Fusion has been granted under the license agreements relating to the
Licensed Software (the "License Agreements") valid and subsisting license rights
with respect to all software comprising the Licensed Software and such rights
may be exercised in any jurisdiction in which Fusion currently conducts its
business and Fusion has valid and subsisting license rights related to the
Licensed Software in all jurisdictions where it has made a currently outstanding
proposal regarding the license or sale of the Proprietary Software. Fusion and
its Subsidiaries are in compliance with each of the terms and conditions of each
of the License Agreements, except to the extent that the failure to so comply,
individually or in the aggregate, would not have a Material Adverse Effect on
Fusion or its Subsidiaries taken as a whole.
(iii) To the Knowledge of Fusion and its
Subsidiaries, Fusion and its Subsidiaries have not interfered with, infringed
upon, misappropriated, or otherwise violated any Intellectual Property,
Proprietary Software, or Licensed Software rights of any third party. Neither
Fusion nor any of its Subsidiaries has ever received any written charge,
complaint, claim, or notice alleging any such interference, infringement,
misappropriation, or violation (or any oral charge, complaint, claim or notice
that Fusion reasonably believes, based on past experiences, made credible
allegation in this regard) which could have a Material Adverse Effect on Fusion
and its Subsidiaries taken as a whole.
(iv) Neither Fusion nor its Subsidiaries have granted
any rights in the Fusion Software to any third party except for rights granted
to value added resellers, distributors or customers in the Ordinary Course of
Business pursuant to written agreements.
(v) The Fusion Software and the related computer
hardware used by Fusion in the operation of its business (the "Fusion Hardware")
are adequate in all material respects, when taken together with the other
assets, resources and personnel of Fusion and its Subsidiaries, to conduct the
business of Fusion and its Subsidiaries in the same manner as such business was
operated during the year ended March 31, 1998, except as would not have a
Material Adverse Effect on Fusion or its Subsidiaries taken as a whole. Except
as set forth in Schedule 3.21, there has not, in the 12-month period preceding
this Agreement, been a disruption that has resulted in a written threat by a
customer to terminate its relationship with Fusion or its Subsidiaries or
institute legal proceedings against Fusion or its Subsidiaries.
(vi) To the Knowledge of Fusion, the Proprietary
Software is "Year 2000 Compliant" in all material respects or, to the extent
that it is not Year 2000 Compliant, that any noncompliance or the costs of
making such Proprietary Software Year 2000 Compliant will not have a Material
Adverse Effect on Fusion and
19
its Subsidiaries taken as a whole. For the purposes of this Agreement, "Year
2000 Compliant" means: (A) the functions, calculations, and other computing
processes of the Proprietary Software (collectively, "Processes") perform in a
consistent manner regardless of the date in time on which the Processes are
actually performed and regardless of the date input to the Proprietary Software,
whether before, on, or after January 1, 2000 and whether or not the dates occur
during leap years and will function without interruption caused by such date;
(B) the Proprietary Software accepts, calculates, compares, sorts, extracts,
sequences, and otherwise processes date inputs and date values, and returns and
displays date values in a consistent manner regardless of the dates used,
whether before, on, or after January 1, 2000; (C) the Proprietary Software
accepts and responds to two-digit year-date input in a manner that resolves any
ambiguities as to the century in a defined, predetermined and appropriate
manner; (D) the Proprietary Software stores and displays date information in
ways that are unambiguous as to the determination of the century; and (E) the
Proprietary Software will function on September 9, 1999 and will accept and
process such data input.
(vii) Schedule 3.21 includes a complete list of
support and maintenance agreements relating to Fusion Software, including
without limitation the identity of the parties entitled to receive such service
or maintenance.
Section 3.22 TANGIBLE PERSONAL PROPERTY. (a) Fusion and its
Subsidiaries own, lease or otherwise have the right to use all tangible personal
property (including, without limitation, furniture, fixtures, equipment, and
supplies) necessary for the conduct of its business as presently conducted and
as presently proposed to be conducted.
(b) Each of Fusion and its Subsidiaries is the sole
lawful and beneficial owner of its owned tangible personal property, free and
clear of all liens and encumbrances, except for (i) liens for current Taxes not
yet due or payable, (ii) liens imposed by law and incurred in the Ordinary
Course of Business for obligations not yet due to carriers, warehousemen,
laborers and materialmen, and (iii) other liens which aggregate to less than
$50,000, and each of Fusion and its Subsidiaries has good and marketable title
to all such property.
(c) The tangible personal property of Fusion and its
Subsidiaries is in good and serviceable condition, reasonable wear and tear
excepted, and the value attributed to it in the Fusion Financial Statements
represents an amount not in excess of the acquisition price, less reasonable
depreciation, of such property.
Section 3.23 EMPLOYEES AND INDEPENDENT CONTRACTORS. (a) Set forth in
Schedule 3.23 is a complete list of the names of all persons who perform
services for Fusion and its Subsidiaries as of the date of this Agreement,
classified as permanent employees, temporary employees, or independent
contractors and classified according to whether the employee's services are
billable to a third party. All of the employees and
20
independent contractors of Fusion and its Subsidiaries are properly and
currently licensed, to the extent that licensure is required, and all of such
licenses are in good standing. To the Knowledge of Fusion and its Subsidiaries,
no employee or group of employees or independent contractors listed in Schedule
3.23 plans to terminate employment with either entity.
(b) Schedule 3.23 contains true and complete copies
of rules of employment (shugyo kisoku) (including without limitation rules of
retirement allowances (taishoku kyuyo kitei)), collective labor agreements (rodo
kyoyaku) and other material documents constituting or evidencing working terms
and conditions applied by Fusion to its officers and/or employees. Other than as
set forth in any such work rules and employment agreements, there are no other
material terms or conditions of employment applicable to Fusion's employees,
directors or officers under which Fusion has any obligations. There is no
written employment contract or agreement between Fusion and any employee of
Fusion other than rules of employment and collective labor agreements set out in
Schedule 3.23 and employment contracts (koyou keiyaku) customarily executed
between Fusion and each employee of Fusion when the employee enters into an
employment relationship with Fusion, the standard forms of which are contained
in Schedule 3.23. There is no material oral employment contract or agreement
between Fusion and any employee of Fusion.
(c) Fusion has paid in full to its employees all
wages, salaries, commissions, bonuses, retirement allowances and other direct
and indirect compensation which were payable prior to the Closing. To the
Knowledge of Fusion, (i) Fusion is in compliance with all applicable national
and local laws and regulations respecting employment and employment practices,
terms and conditions of employment and wages and hours, except where failure to
be in compliance therewith would not, individually or in the aggregate, have a
Material Adverse Effect on Fusion and its Subsidiaries taken as a whole; (ii)
there is no labor strike, dispute, slowdown or stoppage pending or threatened
against or involving Fusion; (iii) there is no grievance which might have a
Material Adverse Effect on Fusion or the conduct of its business nor any
litigation or arbitration proceeding arising out of or under collective
bargaining agreements or otherwise in respect of labor relations is pending and
no claim for such grievances, litigation or arbitration proceedings has been
asserted; and (iv) no collective bargaining agreement is currently being
negotiated by Fusion.
Section 3.24 FINANCIAL STATEMENTS. Attached to this Agreement as
Exhibit 3.24 are the following financial statements (collectively, the "Fusion
Financial Statements"): (a) unaudited balance sheets and statements of income as
of and for the nine months ended December 31, 1998 for Fusion and each of its
Subsidiaries (the "Most Recent Financial Statements"); (b) unaudited
consolidated balance sheets and statements of income as of and for the year
ended March 31, 1998 and the six months ended September 30, 1998 for Fusion and
each of its Subsidiaries; and (c) unaudited balance sheets and statements of
income as of and for the years ended March 31, 1996, 1997
21
and 1998 for Fusion. The Fusion Financial Statements (including the notes
thereto) comply with JGAAP, and for the periods covered thereby, (i) present
fairly the financial condition of Fusion as of such dates and the results of
operations of Fusion and its Subsidiaries for such periods, (ii) are correct and
complete, and are consistent in all material respects with the books and records
of Fusion (which books and records are correct and complete in all material
respects), and (iii) do not omit any material assets or Liabilities required to
be disclosed in such financial statements in accordance with JGAAP, except that
unaudited interim financial statements are subject to year-end audit adjustments
which are not material either individually or in the aggregate. All other
written financial records and tangible data supplied by Fusion to IMR for the
purpose of enabling IMR to recast the Fusion Financial Statements to comply with
GAAP are accurate in all material respects. Except as set forth in Schedule 3.24
or the Fusion Financial Statements, (x) Fusion has no material Liabilities
except for those that may have been incurred after the Most Recent Financial
Statements in the Ordinary Course of Business, (y) Fusion is not a guarantor or
indemnitor of any indebtedness of any other Person and (z) the assets of Fusion
are not subject to any encumbrances. Fusion's reserves for sales, returns,
warranty claims, bad debts and other items related to the distribution of its
products, and all reserves relating to all Fusion Benefits Plans, are adequate
based on Fusion's historical experience.
Section 3.25 NOTES AND ACCOUNTS RECEIVABLE. Except as set forth in
Schedule 3.25, all notes and accounts receivable of Fusion are reflected
properly on their books and records, are valid receivables subject to no setoffs
or counterclaims, are current and are, to Fusion's Knowledge, collectible in
accordance with their terms at their recorded amounts, subject only to the
reserve for bad debts set forth on the face of the Most Recent Balance Sheet
(rather than in any notes thereto) as adjusted for the passage of time through
the Closing in accordance with the Ordinary Course of Business of Fusion.
Section 3.26 DISCLOSURE. The representations and warranties contained
in this Article III do not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements and
information contained in this Article III not misleading.
Section 3.27 RESTRICTIVE COVENANTS. Prior to the Closing, Alfant and
each other Fusion Shareholder designated by IMR shall have entered into
employment agreements that contain non-compete and non-solicitation provisions
in substantially the form attached as Exhibit 7.1(a). In addition, the
Management Shareholders agree that:
(a) NON-COMPETITION. For a period of three years
(five years for Alfant) following the Closing (or, if this period shall be
unenforceable by law, then for such shorter period as shall be enforceable),
none of the Management Shareholders shall engage, directly or indirectly,
including any active participation or any management, employee or consulting
position, in any activity with any entity or sole
22
proprietorship which is competitive with the business (either at the time of
termination or currently) of IMR of Fusion or any of their Subsidiaries or make
any undue and unfair use of Confidential Information, which such Management
Shareholder would not have had access to but for his executive position with IMR
or Fusion, in any activity with any entity which is competitive with the current
business of IMR or Fusion or any of their Subsidiaries in a territory where IMR
or Fusion or any of their Subsidiaries is now or at any relevant time doing
business.
(b) NON-SOLICITATION OF CUSTOMERS. For a period of
three years (five years for Alfant) following the Closing (or, if this period
shall be unenforceable by law, then for such shorter period as shall be
enforceable), none of the Management Shareholders shall contact, or respond to
any contact, with a view toward selling any product or service competitive with
any product or service sold or proposed to be sold by IMR or Fusion or any of
their Subsidiaries as of the Closing, to any person, firm, association or
corporation: (i) to which IMR or Fusion has sold any product; (ii) which a
Management Shareholder has solicited, contacted or otherwise dealt with on
behalf of Fusion or its Subsidiaries or which was a customer or, to the
knowledge of such Management Shareholder, a prospective customer of Fusion or
any of their Subsidiaries during the three years preceding the Closing. None of
the Management Shareholders shall, directly or indirectly, make any such
contact, either for the benefit of himself or for the benefit of any other
person, firm, association or corporation, and shall not assist any such person,
firm, association or corporation in any manner to make any such contact.
(c) NO EMPLOYMENT OR SOLICITATION OF EMPLOYEES AND
CONSULTANTS. For a period of three years (five years for Alfant) following the
Closing (or, if this period shall be unenforceable by law, then for such shorter
period as shall be enforceable), none of the Management Shareholders shall,
directly or indirectly, solicit for employment or employ any full-time or
part-time employee of IMR or Fusion or any of their Subsidiaries.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF IMR AND THE COMPANY
IMR and the Company represent and warrant to Fusion and the Fusion
Shareholders as follows:
Section 4.1 ORGANIZATION. Each of IMR and the Company is a corporation
duly organized, validly existing, and with active status under the laws of
Florida. Each of IMR and the Company has all requisite corporate power and
authority and all necessary governmental approvals to own, lease, and operate
its properties and to carry on its business as now being conducted except where
the failure to be so organized, existing, and in good standing or to have such
power, authority, and governmental
23
approvals would not have a Material Adverse Effect on IMR and the Company taken
as a whole. Each of IMR and the Company is duly qualified or licensed to do
business and is in good standing in each jurisdiction in which the property
owned, leased, or operated by it or the nature of the business conducted by it
makes such qualification or licensing necessary, except where the failure to be
so duly qualified or licensed and in good standing would not in the aggregate
have a Material Adverse Effect on IMR and the Company taken as a whole. The
Company is an indirect wholly-owned Subsidiary of IMR.
Section 4.2 ISSUANCE OF IMR COMMON STOCK. The Consideration Shares,
when issued in accordance with the terms of this Agreement, will be duly
authorized, validly issued, fully paid, non-assessable and issued in compliance
with applicable United States federal and state securities laws subject to the
truth and accuracy of the representations made by the Fusion Shareholders in the
Shareholder Certificates. The Consideration Shares are not subject to any right
of first refusal or other restriction, and no other Person has any interest or
right in the Consideration Shares.
Section 4.3 AUTHORITY. IMR and the Company have the requisite corporate
power and authority to execute and deliver this Agreement and to consummate the
transactions contemplated by this Agreement. The execution, delivery, and
performance of this Agreement, and the consummation of the Acquisition and the
other transactions contemplated by this Agreement, have been duly authorized by
all necessary corporate action on the part of IMR and the Company and no other
corporate proceedings on the part of IMR and the Company are necessary to
authorize the execution and delivery of this Agreement or to consummate the
transactions so contemplated. No filing, authorization or approval, governmental
or otherwise, is necessary to enable IMR or the Company to enter into and
perform their obligations under this Agreement (except relating to the
registration rights contemplated by Article V). This Agreement has been duly
executed and delivered by IMR and the Company and, assuming this Agreement
constitutes a valid and binding obligation of Fusion and the Fusion
Shareholders, constitutes a valid and binding obligation of each of IMR and the
Company enforceable against them in accordance with its terms, subject to the
laws of general application relating to bankruptcy, insolvency and the relief of
debtors and to the rules of law governing specific performance, injunctive
relief or other equitable remedies.
Section 4.4 SEC REPORTS AND FINANCIAL STATEMENTS. (a) IMR has filed
with the SEC, and has made available to Fusion complete copies of all forms,
reports, schedules, statements, and other documents required to be filed by it
since November 1996, under the Exchange Act or the Securities Act (as such
documents have been amended since the time of their filing, collectively, the
"IMR SEC Documents"). As of their respective dates, the IMR SEC Documents
(including, without limitation, any financial statements or schedules included
therein) (i) were prepared in compliance with the requirements of the Securities
Act or the Exchange Act, as the case may be, and the rules and
24
regulations of the SEC promulgated thereunder and (ii) did not at the time of
filing (or if amended, supplemented or superseded by a filing prior to the date
hereof, on the date of that filing) contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
(b) Each of the consolidated financial statements (including,
in each case, any related notes thereto) contained in the IMR SEC Documents has
been prepared in accordance with GAAP applied on a consistent basis throughout
the period involved (except as may be indicated in the notes thereto) and each
fairly presents the consolidated financial position of IMR and its Subsidiaries
as of the respective dates thereof and the consolidated results of its
operations and cash flows for the periods indicated, except that the unaudited
interim financial statements were or are subject to normal and recurring
year-end adjustments which were not or are not expected to be material in
amount.
Section 4.5 INTERIM OPERATIONS OF THE COMPANY. The Company was formed
solely for the purpose of engaging in the transactions contemplated by this
Agreement, has engaged in no other business activities, and has conducted its
operations only as contemplated by this Agreement.
Section 4.6 ACCOUNTING MATTERS. To the knowledge of IMR and the
Company, neither IMR nor the Company nor any of their affiliates has taken or
agreed to take any action that would affect the ability of IMR to account for
the business combination to be effected by the Acquisition as a "pooling of
interests."
Section 4.7 CONSENTS AND APPROVALS: NO VIOLATIONS. Except as set forth
in Schedule 4.7, and except for filings, permits, authorizations, consents, and
approvals as may be required under, and other applicable requirements the
Exchange Act, the Securities Act or the laws of other jurisdictions in which IMR
or the Company is qualified to do or is doing business, neither the execution,
delivery, or performance of this Agreement by IMR and the Company, nor the
consummation by IMR and the Company of the transactions contemplated by this
Agreement, nor compliance by IMR and the Company with any of the provisions of
this Agreement will (a) conflict with or result in any breach of any provision
of the certificate of incorporation or the bylaws of IMR and the Company or of
any of their Subsidiaries, (b) require any filing with, or authorization,
consent, permit, or approval of, any Governmental Entity, except whether the
failure to obtain such authorizations, consents, permits or approval or to make
such filings, would not have a Material Adverse Effect on IMR and its
Subsidiaries taken as a whole, (c) result in a violation or breach of, or
constitute (with or without notice or lapse of time or both) a default (or give
rise to any right of termination, amendment, cancellation, or acceleration)
under, any of the terms, conditions, or provisions of any note, bond, mortgage,
indenture, lease, license, contract, agreement, or other instruments or
obligations to which IMR or any of its Subsidiaries
25
is a party or by which any of them or any of their properties or assets may be
bound, or (d) violate any order, writ, injunction, decree, statute, rule, or
regulation applicable to IMR, any of its Subsidiaries, or any of their
properties or assets, except as they relate to (c) or (d), for violations,
breaches, or defaults that would not, individually or in the aggregate, have a
Material Adverse Effect on IMR and its Subsidiaries taken as a whole. The
consummation of the Acquisition will not require the consent of any third party
except where the failure to obtain such consent would not have a Material
Adverse Effect, either individually or in the aggregate, upon any rights,
licenses, franchises, leases, material obligations of third parties to IMR and
the Company or material obligations of IMR and the Company to third parties,
pursuant to the terms of any material contracts.
Section 4.8 CAPITALIZATION. As of December 31, 1998, the authorized
capital stock of IMR consists of (a) 100,000,000 shares of IMR Common Stock of
which, approximately 30,000,000 shares were issued and outstanding, and (b)
10,000,000 shares of preferred stock, par value $.10 per share, of which, no
shares were issued and outstanding. Since December 31, 1998, there have been no
material issuances of IMR common stock except for issuances pursuant to IMR
stock option plans or employee benefit plans and in connection with
acquisitions. All of the outstanding shares of IMR's capital stock are, and all
shares of the IMR Common Stock that are to be issued pursuant to the Acquisition
are duly authorized, validly issued, fully paid and nonassessable and free of
any preemptive rights. As of December 31, 1998, there were no outstanding
contractual obligations of IMR or any of its Subsidiaries to repurchase, redeem,
or otherwise acquire any shares of capital stock of IMR or any of its
Subsidiaries that would have a Material Adverse Effect on IMR and its
Subsidiaries taken as a whole.
ARTICLE V
ADDITIONAL AGREEMENTS
Section 5.1 RESTRICTED SHARES. (a) The parties to this Agreement
acknowledge and agree that the shares of IMR Common Stock to be issued pursuant
to Article II will not be registered under the Securities Act and therefore
shall constitute "restricted securities" within the meaning of the Securities
Act. Until such time as the holder thereof provides IMR with evidence reasonably
satisfactory to IMR that the Consideration Shares may be transferred without
registration or restriction, the certificates representing the Consideration
Shares shall bear appropriate legends to identify the transfer of such privately
placed shares as being restricted under the Securities Act, and subject to
compliance with applicable state securities laws. It is acknowledged and
understood that IMR is relying upon the representations made by each Fusion
Shareholder in the Shareholder Certificates in connection with the issuance of
IMR Common Stock to such shareholders.
26
Section 5.2 DEMAND REGISTRATION RIGHTS. Notwithstanding the provisions
of Section 5.1, the holders of 65% of the Consideration Shares (the "
Registrable Shares") will be entitled to have IMR effect one demand registration
of the Consideration Shares then owned of record by such shareholders (the
"Requesting Shareholders") to the extent permitted by Section 5.3 and the
applicable registration form. The request for such registration must be made in
writing by holders owning 65% of the Registrable Shares and can be made during
the period commencing on the one month anniversary of Closing and ending on the
one year anniversary of Closing, and IMR shall diligently pursue the preparation
of combined financial statements, including the preparation of any financial
information with respect to Fusion, the completion of any audit of Fusion's
books and records, and the restatement of any past financial statements
according to GAAP as are required under SEC regulations in order to permit the
registration of the Registrable Shares. IMR will use its reasonable commercial
efforts to cause the Registrable Shares specified in the request to be
registered as soon as practicable so as to permit the sale of such shares and
IMR will promptly notify the Requesting Shareholder of a proposed registration.
IMR will include in its registration the lesser of (a) the number of Registrable
Shares specified in the Requesting Shareholder's registration request, or (b)
39% of the Registrable Shares. The Requesting Shareholders that request
registration will have their Registrable Shares registered on a pro rata basis.
If the registration will involve an underwritten distribution of IMR Common
Stock by IMR (but not in the case of an underwritten distribution of securities
other than IMR Common Stock), subject to the provisions of this paragraph and
the following paragraph, (i) IMR shall include in the underwriting all the
Registrable Shares that the Requesting Shareholder is entitled to include in the
registration, (ii) the Requesting Shareholder shall sell the Registrable Shares
through the underwriter or syndicate of underwriters selected by IMR, and (iii)
the Requesting Shareholder shall enter into an underwriting agreement with the
underwriter or syndicate of underwriters selected by IMR, which will provide
(among other things) for IMR, the Requesting Shareholder, and each underwriter
(and each person who controls each underwriter within the meaning of Section 15
of the Securities Act) to grant to each other (and to each person who controls
each of them within the meaning of Section 15 of the Securities Act) reciprocal
indemnification against Liabilities under the Securities Act, subject to such
limitations as are appropriate to reflect the parties' respective interests in
the underwriting.
Section 5.3 CONDITIONS TO REGISTRATION. IMR's obligations under Section
5.2 to register any Registrable Shares owned by a Requesting Shareholder is
subject to the following conditions:
(a) The Requesting Shareholder must provide to IMR all
information, and take all action, IMR reasonably requests with reasonable
advance notice, to enable it to comply with any applicable law or regulation or
to prepare the registration statement that will cover the Registrable Shares
that will be included in the registration;
27
(b) Before the filing of a registration statement pertaining
to the registration, the Requesting Shareholder must deliver to IMR an agreement
containing the following agreements and representations:
(i) The Requesting Shareholder shall furnish to IMR
all information, and take all action, IMR reasonably requests with reasonable
advance notice, to enable it to comply with any applicable law, rule,
regulation, or SEC pronouncement in connection with the registration;
(ii) All sales of the Registrable Shares included in
the registration will be made in a manner contemplated by the SEC's General
Instructions for use of the applicable registration statement form;
(iii) The Requesting Shareholder promptly shall
notify IMR in writing when all the Registrable Shares included in the
registration have been sold, and, if any of them are not sold before the 91st
day after the effective date of the registration statement, the Requesting
Shareholder promptly shall notify IMR of the number of Registrable Shares sold
during the three-month period following the effective date of the registration
and during each ensuing six-month period, until all the Registrable Shares
included in the registration have been sold;
(iv) The Requesting Shareholders shall pay all sales
commissions and underwriting discounts relating to the Registrable Shares they
sell;
(v) If during the effectiveness of the registration
statement for the registration, IMR notifies the Requesting Shareholder of the
occurrence of any intervening event that, in the opinion of IMR's legal counsel,
causes the prospectus included in the registration statement not to comply with
the Securities Act, the Requesting Shareholder, promptly after receipt of IMR's
notice, shall cease making any offers, sales, or other dispositions of the
Registrable Shares included in the registration until the Requesting Shareholder
receives from IMR copies of a new, amended, or supplemented prospectus complying
with the Securities Act (which IMR agrees to provide as promptly as
practicable);
(vi) If IMR is selling any IMR Common Stock for cash
consideration pursuant to the registration, the Requesting Shareholder shall
sell those Registrable Shares that are included in the registration on the same
terms (including the method of distribution) as those on which the other shares
of IMR Common Stock included in the registration will be offered and sold; and
(vii) To the extent requested by IMR and the managing
underwriter of the offering to which the registration relates, the Requesting
Shareholder shall not offer, sell, or otherwise transfer, for a reasonable
period of time (to be determined by the underwriter, but not to exceed 180 days)
after the effective
28
date of the registration statement, any shares of IMR Common Stock that are
owned by it and not included in the registration, except for any testamentary
disposition or any gift of IMR Common Stock to a donee who agrees to be bound by
this restriction.
(c) The inclusion of the Registrable Shares in the
registration must not violate any provisions of the Securities Act or the
Exchange Act, any rules or regulations promulgated under the Securities Act or
the Exchange Act.
(d) Notwithstanding the foregoing, if IMR shall
furnish to the Requesting Shareholders a certificate signed by a duly authorized
officer of IMR stating that, in the good faith judgment of the board of
directors of IMR, it would be seriously detrimental to IMR for such registration
statement to be filed on or before the date such filing would be required, then
IMR shall be entitled to postpone filing of the registration statement for up to
60 days; provided, however, that IMR shall be entitled to issue such a
certificate only one time.
Section 5.4 REGISTRATION PROCEDURES. IMR will keep each holder
participating in any registration pursuant to this Agreement advised in writing
as to the initiation of each registration and as to the completion thereof. At
its expense, IMR will:
(a) keep such registration continuously effective for
60 days or such reasonable period necessary to permit the holder or holders to
complete the distribution described in the registration statement relating
thereto, whichever is first to occur;
(b) promptly prepare and file with the SEC such
amendments and supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to comply with the provisions
of the Securities Act, and to keep such registration statement effective for
that period of time specified in Sections 5.4(a);
(c) furnish such number of prospectus and other
documents incident thereto as a holder from time to time may reasonably request;
(d) use reasonable commercial efforts to obtain the
withdrawal of any order suspending the effectiveness of a registration
statement, or the lifting of any suspension of the qualification of any of the
Registrable Shares for sale in any jurisdiction, at the earliest possible
moment;
(e) register or qualify such Registrable Shares for
offer and sale under the securities or blue sky laws of such United States
jurisdictions as any holder or underwriter reasonably requests and keep such
registration or qualification effective during the period set forth in Section
5.4(a); provided, however, IMR shall not be
29
required to register or qualify if it would be required to generally qualify to
do business in a jurisdiction it is not already so qualified.
(f) cause all Registrable Shares covered by such
registration to be listed on Nasdaq;
(g) enter into such customary agreements (including
underwriting agreements in customary form) in order to expedite or facilitate
the disposition of such Registrable Shares; and
(h) notify each holder, at any time a prospectus
covered by such resignation statement is required to be delivered under the
Securities Act, of the happening of any event of which it has knowledge as a
result of which the prospectus included in such registration statement, as then
in effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing.
Section 5.5 POOLING OF INTERESTS. The parties expressly agree that, if
any term or condition of this Agreement or the application of the same to any
Person or circumstances preclude the use of the "pooling of interests"
accounting treatment by IMR for U.S. accounting purposes in connection with this
Agreement, then, (a) such term will be of no force and effect to the extent
necessary to preserve the "pooling of interests" accounting treatment under this
Agreement; and (b) in the event that any term or conditions of this Agreement is
subject to different interpretation under Section 5.5(a):
(i) the remainder of the terms and conditions of this
Agreement shall not be affected; and
(ii) in lieu of such term or condition, a new term or
condition will be added to this Agreement in terms as similar as may be
possible.
Section 5.6 EXPENSES. Whether or not this Acquisition is consummated,
IMR will bear all of its fees, costs and expenses incurred in connection with
this Agreement and the transactions contemplated by this Agreement. If this
Acquisition is not consummated, Fusion will bear all of its fees, costs and
expenses incurred in connection with this Agreement and the transactions
contemplated by this Agreement. If this Acquisition is consummated, IMR or
Fusion will pay all reasonable fees, costs and expenses incurred by Fusion and
the Fusion Shareholders in connection with this Agreement and the transactions
contemplated by this Agreement up to a maximum of $1.45 million, subject to
approval by IMR and Alfant, and any fees, costs or expenses of the Fusion
Shareholders or Fusion in excess of $1.45 million will be paid by the Fusion
Shareholders on a pro rata basis.
30
Section 5.7 BROKERS OR FINDERS. Except as set forth on Exhibit 5.7,
each of IMR, Fusion and the Fusion Shareholders represents, as to itself, its
Subsidiaries, and its Affiliates, that no agent, broker, investment bankers,
financial advisor, or other firm or person is or will be entitled to any
brokers' or finder's fee or any other commission or similar fee in connection
with any of the transactions contemplated by this Agreement and each of IMR,
Fusion and the Fusion Shareholders agrees to indemnify and hold the other
harmless from and against any and all claims, Liabilities, or obligations with
respect to any other fees, commissions, or expenses asserted by any person on
the basis of any act or statement alleged to have been made by such party or its
affiliate.
Section 5.8 ADDITIONAL AGREEMENTS. If at any time after the Closing any
further action is necessary or desirable to carry out the purposes of this
Agreement or to vest the Company with full title to the Fusion Stock or the
Fusion Shareholders with full title to the Consideration Shares, the parties and
their proper officers and directors and the Fusion Shareholders shall take all
such necessary action.
Section 5.9 CONFIDENTIALITY/NON-DISCLOSURE. Except for such disclosure
to the parties' professional advisors as may be necessary or appropriate and
such disclosure as may be required by court order or by any law or regulation to
which a party is subject, or in order to defend litigation, the parties to this
Agreement agree that they shall use all reasonable efforts to maintain in
confidence the existence and terms of this Agreement and shall refrain from
using any Confidential Information, except in connection with this Agreement.
Upon any termination of this Agreement, each of the parties shall promptly
deliver to the other parties all tangible embodiments (and all copies) of the
Confidential Information of the other party which are in its possession.
ARTICLE VI
INDEMNIFICATION; SURVIVAL
Section 6.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All of the
representations and warranties of Fusion and the Fusion Shareholders, and IMR
and the Company contained in Article III and Article IV, as the case may be, of
this Agreement shall survive the Closing and continue in full force and effect
for a period of one year from the Closing Date, except for Adverse Consequences
resulting from the breach of a representation or warranty due to the fraud of
any party, which shall continue until the expiration of the applicable statutes
of limitation.
Section 6.2 INDEMNIFICATION PROVISIONS FOR THE BENEFIT OF IMR. Subject
to the limitations as set forth in this Article VI, if Fusion or any of the
Fusion Shareholders breaches (or in the event any third party alleges facts
that, if true, would mean Fusion or any of the Fusion Shareholders had breached)
any of their representations, warranties, or covenants contained in this
Agreement, and, IMR makes a written claim
31
for indemnification against the Fusion Shareholders within the applicable
survival period set forth in Section 6.1, then each Fusion Shareholder, jointly
and severally up to the Fusion Shareholder Maximum Amount, agrees to indemnify
IMR from and against any Adverse Consequences IMR may suffer through the date of
the claim for indemnification until the end of any applicable survival period,
resulting from, arising out of, or caused by the breach (or the alleged breach).
Notwithstanding anything in this Section to the contrary, no Fusion Shareholder
in compliance with Section 3.27 of this Agreement shall be liable for any breach
of Section 3.27 by another Fusion Shareholder.
Section 6.3 INDEMNIFICATION PROVISIONS FOR THE BENEFIT OF THE FUSION
SHAREHOLDERS. Subject to the limitations set forth in this Article VI, if IMR or
the Company breaches (or in the event any third party alleges facts that, if
true, would mean IMR or the Company had breached) any of their representations,
warranties or covenants contained in this Agreement and the Fusion Shareholders
make a written claim for indemnification against IMR and the Company within the
applicable survival period set forth in Section 6.1, then IMR up to the IMR
Maximum Amount, agrees to indemnify the Fusion Shareholders from and against any
Adverse Consequences the Fusion Shareholders may suffer through the date of the
claim for indemnification until the end of any applicable survival period
resulting from, arising out of or caused by the breach (or the alleged breach).
Section 6.4 MATTERS INVOLVING THIRD PARTIES. (a) If any third party
notifies IMR or the Fusion Shareholders (the "Indemnified Party") with respect
to any matter (a "Third Party Claim") which may give rise to a claim for
indemnification against Fusion or the Fusion Shareholders on the one hand, or
IMR on the other hand (the "Indemnifying Party") under this Article VI, then the
Indemnified Party shall promptly (and in any event within ten business days
after receiving notice of the Third Party Claim) notify the Indemnifying Party
in writing; provided, however, that no delay on the part of the Indemnified
Party in notifying the Indemnifying Party shall relieve the Indemnifying Party
from any obligation under this Agreement unless (and then solely to the extent)
the Indemnifying Party is prejudiced.
(b) The Indemnifying Party will have the right to
defend the Indemnified Party against the Third Party Claim with counsel of its
choice reasonably satisfactory to the Indemnified Party so long as (i) the
Indemnifying Party notifies the Indemnified Party in writing within 15 days
after the Indemnified Party has given notice of the Third Party Claim that the
Indemnifying Party will indemnify the Indemnified Party from and against the
entirety of any Adverse Consequences the Indemnified Party may suffer resulting
from, arising out of, relating to, in the nature of, or caused by the Third
Party Claim (or will defend under a reservation of rights), (ii) the
Indemnifying Party provides the Indemnified Party with evidence reasonably
acceptable to the Indemnified Party that the Indemnifying Party will have the
financial resources to defend against the Third Party Claim and fulfill its
indemnification
32
obligations under this Agreement, (iii) the Third Party Claim involves only
money damages and does not seek an injunction or other equitable relief, (iv)
settlement of, or an adverse judgment with respect to, the Third Party Claim is
not, in the good faith judgment of the Indemnified Party, likely to establish a
precedential custom or practice materially adverse to the continuing business
interest of the Indemnified Party, and (v) the Indemnifying Party conducts the
defense of the Third Party Claim actively and diligently.
(c) So long as the Indemnifying Party is conducting
the defense of the Third Party Claim in accordance with Section 6.4(b), (vi) the
Indemnified Party may retain separate co-counsel at its sole cost and expense
and participate in the defense of the Third Party Claim, (vii) the Indemnified
Party will not consent to the entry of any judgment or enter into any settlement
with respect to the Third Party Claim without the prior written consent of the
Indemnifying Party (not to be withheld unreasonably), and (viii) the
Indemnifying Party will not consent to the entry of any judgment or enter into
any settlement with respect to the Third Party Claim without the prior written
consent of the Indemnified Party (not to be withheld unreasonably).
(d) In the event any of the conditions in Section
6.4(b) fail to be complied with, however, (ix) the Indemnified Party may defend
against, and consent to the entry of any judgment or enter into any settlement
with respect to the Third Party Claim in any manner it reasonably may deem
appropriate (and the Indemnified Party need not consult with, or obtain any
consent from the Indemnifying Party), (x) the Indemnifying Party will reimburse
the Indemnified Party promptly and periodically for the costs of defending
against the Third Party Claim (including reasonable attorneys' fees an
expenses), and (xi) the Indemnifying Party will remain responsible for any
Adverse Consequences the Indemnified Party may suffer resulting from, arising
out of, relating to, in the nature of, or caused by the Third Party Claim to the
fullest extent provided in this Article VI.
Section 6.5 DETERMINATION OF ADVERSE CONSEQUENCES. All claims for
indemnification payments under this Article VI shall be made in good faith and
although a claim may be made under the Agreement, no payments shall be made for
the benefit of IMR until IMR has incurred actual out-of-pocket expenses.
Section 6.6 OTHER INDEMNIFICATION PROVISIONS. Each of the Fusion
Shareholders agrees that he will not make any claim for indemnification against
Fusion by reason of the fact that he was a director, officer, employee, or agent
of any such entity or was serving at the request of any such entity as a
partner, trustee, director, officer, employee, or agent of another entity
(whether such claim is for judgments, damages, penalties, fines, costs, amounts
paid in settlement, losses, expenses, or otherwise and whether such claim is
pursuant to any statute, charter document, bylaw, agreement, or otherwise) with
respect to any action, suit, proceeding, complaint, claim, or demand
33
brought by IMR against Fusion (whether such action, suit, proceeding, complaint,
claim, or demand is pursuant to this Agreement, applicable law, or otherwise).
Section 6.7 CERTAIN LIMITATIONS. Notwithstanding anything in this
Agreement to the contrary, in no event shall any Fusion Shareholder have any
obligation to indemnify IMR from or against any Adverse Consequences, or have
any other obligation to IMR or any third party under this Agreement (a) in an
amount exceeding the Fusion Shareholder's Maximum Amount or (b) until IMR has
suffered Adverse Consequences by reason of all breaches (or alleged breaches) by
the Fusion Shareholders that exceed, a threshold of $250,000. Notwithstanding
anything in this Agreement to the contrary, in no event shall IMR have any
obligation to indemnify the Fusion Shareholders from or against any Adverse
Consequences, or have any other obligation to the Fusion Shareholders or any
third party under this Agreement (a) in an amount exceeding the IMR Maximum
Amount or (b) until the Fusion Shareholders have suffered Adverse Consequences
by reason of all breaches (or alleged breaches) by IMR that exceed a threshold
of $250,000. If in either case such $250,000 threshold is exceeded, then the
claiming party shall be entitled to indemnification from the first dollar of
Adverse Consequences.
ARTICLE VII
ADDITIONAL DELIVERIES
Section 7.1 ADDITIONAL DELIVERIES AT THE TIME OF EXECUTION OF THIS
AGREEMENT. Each of the following agreements and other items has been delivered
simultaneously with the execution of this Agreement:
(a) EMPLOYMENT AGREEMENTS. Alfant has entered into an
employment agreement in substantially the form set forth in Exhibit 7.1(a).
(b) CONSENTS UNDER FUSION OBLIGATIONS. Fusion has
delivered the consent or approval of any person whose consent or approval shall
be required under any agreement or instrument in order to permit the
consummation of the transactions contemplated by this Agreement except those
which the failure to obtain would not, individually or in the aggregate, have a
Material Adverse Effect on IMR or Fusion.
(c) LEGAL OPINION. (i) IMR has received the legal
opinion of Yuasa & Hara, counsel to Fusion, in the form reasonably acceptable to
IMR; and (ii) IMR has received the legal opinion of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, in
the form reasonably acceptable to IMR.
(d) LEGAL OPINION. (i) Fusion has received the legal
opinion of Holland & Knight LLP, counsel to IMR, in the form reasonably
acceptable to Fusion;
34
and (ii) Fusion has received the legal opinion of Asahi Law Offices, counsel to
IMR, in the form reasonably acceptable to Fusion.
ARTICLE VIII
APPOINTMENT OF REPRESENTATIVE
Section 8.1 APPOINTMENT; AUTHORITY. Each Fusion Shareholder irrevocably
authorizes, directs and appoints Alfant to act as sole and exclusive agent,
attorney-in-fact and representative of the Fusion Shareholders (the
"Representative") in his discretion to (a) take any and all actions (including
executing and delivering any documents or agreeing to make any payments,
incurring any costs and expenses for the account of the Fusion Shareholders and
making any and all determinations) which may be required or permitted by this
Agreement to be taken by the Fusion Shareholders; (b) exercise such other
rights, power and authority as are authorized, delegated and granted to the
Representative under this Agreement; and (c) exercise such rights, power and
authority as are incidental to the foregoing. Without limiting the foregoing,
the Representative shall have the duty and authority on behalf of the Fusion
Shareholders to do anything required of the Representative under this Agreement,
including to: (i) determine and resolve any disputes that may arise under this
Agreement, using his best efforts to resolve all such disputes by agreed
settlement or arbitration; (ii) defend or prosecute any claim or right of the
Fusion Shareholders under this Agreement arising out of or in connection with
any breach by IMR and the Company of any of the terms and provisions of this
Agreement; and (iii) select and retain legal counsel to assist him in
interpreting and advising him with respect to his rights, authority and
obligations (and those of the Fusion Shareholders) under this Agreement and, on
behalf of the Fusion Shareholders, to select and retain legal counsel (and other
professionals and experts) to assist them in the performance of their duties
under this Agreement. Each Fusion Shareholder acknowledges and agrees that: (x)
such Fusion Shareholder has entered into this Agreement and has appointed the
Representative as agent of such Fusion Shareholder under this Agreement in
consideration of each other Fusion Shareholder doing the same; (y) the agency
created by this Agreement is intended to benefit all Fusion Shareholders; and
(z) the agency created by this Agreement is irrevocable and shall not be
affected by the subsequent disability or incompetence of any of the Fusion
Shareholders.
Section 8.2 BINDING NATURE; NO INDEPENDENT ACTION. Any actions,
exercises of rights, power or authority, and any decisions or determinations
made by the Representative shall be absolutely and irrevocably binding on each
Fusion Shareholder as if such Fusion Shareholder personally had taken such
action, exercised such rights, power or authority or made such decision or
determination in such Fusion Shareholder's own capacity. Notwithstanding any
other provision of this Agreement, (a) each Fusion Shareholder irrevocably
relinquishes its right to act independently and other than through the
Representative with respect to any matter covered by or related
35
to this Agreement (except with respect to the removal of the Representative or
appointment of a successor Representative), and (b) no Fusion Shareholder shall
have any right to institute any suit, action or proceeding against IMR and the
Company with respect to any such matter, any such right being irrevocably and
exclusively delegated to the Representative. The decisions, acts and
instructions of the Representative shall be final, binding and conclusive upon
each of the Fusion Shareholders for all purposes. IMR and the Company may rely
upon any such decision, act or instruction of the Representative as being the
decision, act or instruction of each and all of the Fusion Shareholders. Notices
or communications to or from the Representative shall constitute notice to or
from the Fusion Shareholders. IMR and the Company are relieved from any
liability for any acts done by them in accordance with any such decision, act or
instruction of the Representative.
Section 8.3 ACCEPTANCE OF APPOINTMENT. Alfant acknowledges and accepts
the foregoing authorization and appointment and agrees to serve as the
Representative in accordance with this Agreement.
Section 8.4 COMPENSATION, EXPENSES, ETC.. No bond shall be required of
the Representative, and no Representative shall receive compensation for his
service. All expenses incurred by the Representative in performing the duties
assigned by this Agreement shall be borne as agreed by the Fusion Shareholders.
Section 8.5 REPLACEMENT. In the event that Alfant shall resign or
become unable to fulfill his duties under this Article VIII by reason of his
death or disability, effective as of the date of death or disability, he shall
be replaced by ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, and the Fusion Shareholders irrevocably
authorize, direct and appoint ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ as Representative, effective as
of such date. IMR and the Company and the Fusion Shareholders shall be promptly
notified by ▇▇▇▇▇▇▇ ▇.▇▇▇▇▇▇ in the event Alfant ceases to be Representative for
any reason and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ is appointed as successor Representative. In
the event that ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ or any later successor resigns, declines or is
unable to serve as Representative for any reason, or in the event that the
Fusion Shareholders wish to replace the Representative prior to the expiration
of the term of the Representative's duties set forth in Section 8.6, the Fusion
Shareholders shall promptly designate a new Representative, which new
Representative shall be subject to the reasonable consent of IMR. Any person who
succeeds any Representative pursuant to this Agreement shall be required to sign
an appropriate agreement adopting and agreeing to be bound by all applicable
provisions of this Agreement, a copy of which shall be delivered to IMR.
Section 8.6 TERMINATION OF DUTIES. The duties of the Representative
shall terminate upon the first anniversary of the expiration of the
representations and warranties of the Fusion Shareholders under Article III;
provided, however, that if a dispute between the parties has been commenced and
remains unresolved at that time, the duties of the Representative shall
terminate upon the final resolution of all then
36
pending disputes. If any person serving as Representative shall resign, be
removed or become unable to fulfill his duties under this Agreement, the
obligations of such person shall terminate upon the proper appointment or
election of the successor Representative pursuant to Section 8.5.
ARTICLE IX
MISCELLANEOUS
Section 9.1 NOTICES. All notices and other communications under this
Agreement shall be in writing and shall be deemed given if delivered personally,
telecopied (if confirmed), or mailed by registered or certified mail (return
receipt requested) to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
(a) If to IMR:
IMRglobal Corp.
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Senior Vice President
Facsimile: ▇-▇▇▇-▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇ ▇▇▇▇▇, Esq.
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: ▇-▇▇▇-▇▇▇-▇▇▇▇
and
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Asahi Law Offices
▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇. ▇▇-▇, ▇▇▇▇▇▇▇ 2-chome
Minato-ku, Tokyo 107-8485
Facsimile: ▇▇-▇-▇▇▇▇-▇▇▇▇
and
37
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Holland & Knight LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: ▇-▇▇▇-▇▇▇-▇▇▇▇
(b) If to Fusion:
Fusion System Japan Co., Ltd.
c/o ▇▇▇▇▇ ▇▇▇▇▇, Investment Banking Group
Bank of America
ARK ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇. ▇▇-▇▇, ▇▇▇▇▇▇▇ 1-chome
Minato-ku, Tokyo 107-6034
Facsimile: ▇▇-▇-▇▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇-▇-▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇-▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇
Facsimile: ▇▇-▇-▇▇▇▇-▇▇▇▇
(c) If to the Fusion Shareholders:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Fusion Systems Japan, Inc.
Daiwa Naka-Meguro Building S-8F
▇-▇-▇ ▇▇▇▇-▇▇▇▇▇▇
▇▇▇▇▇▇-▇▇, ▇▇▇▇▇ ▇▇▇-▇▇▇▇
Facsimile: ▇▇-▇-▇▇▇▇-▇▇▇▇
Section 9.2 INTERPRETATION. When a reference is made in this Agreement
to Sections, such reference shall be to a Section of this Agreement unless
otherwise indicated. The table of contents and headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Whenever the words "include,"
"includes," or "including" are used in this Agreement, they shall be deemed to
be followed by the words "without limitation."
38
Section 9.3 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when two or more counterparts have been signed by each of
the parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.
Section 9.4 ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES; RIGHTS OF
OWNERSHIP. This Agreement (including the documents and instruments referred to
herein) constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter of this Agreement. No third party beneficiaries are intended in
connection with this Agreement.
Section 9.5 GOVERNING LAW; ARBITRATION. This Agreement shall be
governed by and construed in accordance with the laws of Japan, without
reference to any conflict or choice or laws, rules or principles. All disputes
arising out of or in connection with this Agreement shall be finally settled
under the Rules of Arbitration of the International Chamber of Commerce by one
or more arbitrators appointed in accordance with the said rules. The arbitration
shall take place in Tokyo, Japan and be conducted in the English language.
Section 9.6 PUBLICITY. Except as otherwise required by law or the rules
of Nasdaq, for so long as this Agreement is in effect, neither Fusion, the
Fusion Shareholders nor IMR shall, or shall permit any of its Subsidiaries to,
issue or cause the publication of any press release or other public announcement
with respect to the transactions contemplated by this Agreement without the
consent of the other party, which consent shall not be unreasonably withheld.
Section 9.7 ASSIGNMENT. Neither this Agreement nor any of the rights,
interests, or obligations under this Agreement shall be assigned by any of the
parties (whether by operation of law or otherwise) without the prior written
consent of the other parties, except that the Company may assign, in its sole
discretion, any or all of its rights, interests, and obligations under this
Agreement to IMR or to any direct or indirect wholly-owned Subsidiary of IMR.
Subject to the preceding sentence, this Agreement will be binding upon, inure to
the benefit of, and be enforceable by the parties and their respective
successors and assigns.
39
Section 9.8 AMENDMENT. This Agreement may not be amended except by an
instrument signed on behalf of each of the parties to this Agreement.
Section 9.9 LANGUAGE. This Agreement (including Exhibits and Schedules)
is made in the English language only. This Agreement may be translated for the
purpose of convenience and for application for any approvals of any Governmental
Entity. If there shall arise any conflict between the English version and any
translation of this Agreement, the English version shall prevail.
Section 9.10 MATERIALITY OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties contained in Articles III and IV of this
Agreement and the Shareholder's Certificate are deemed to be material and the
party to whom said representations and warranties are made is entering into this
Agreement relying on such representations and warranties.
40
IN WITNESS WHEREOF, IMR, the Company, Fusion, and the Fusion
Shareholders have caused this Agreement to be executed on the date first written
above.
FUSION SYSTEM JAPAN CO., LTD.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
President
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, in his individual
capacity as a Fusion Shareholder
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, as attorney-in-fact for
▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, as attorney-in-fact for
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, as attorney-in-fact for
▇▇▇ ▇. ▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, as attorney-in-fact for
▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, as attorney-in-fact for
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, as attorney-in-fact for
▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, as attorney-in-fact for
▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, as attorney-in-fact for
▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, as attorney-in-fact for
▇▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, as attorney-in-fact for
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, as attorney-in-fact for
▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, as attorney-in-fact for
▇▇▇▇ ▇▇▇▇▇
41
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, as attorney-in-fact for
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, as attorney-in-fact for
▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, as attorney-in-fact for
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, as attorney-in-fact for
Mami Alfant
IMRGLOBAL CORP.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------
Title: Senior Vice President
----------------------
IMR SUB AB CORP.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------
Title: President
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42
EXHIBIT 2.9
FUSION SYSTEM JAPAN CO., LTD.
SHAREHOLDERS CERTIFICATE
The undersigned is aware that pursuant to a certain proposed
Acquisition Agreement (the "Agreement"), to be entered into by and among
IMRglobal Corp., formerly Information Management Resources, Inc., a Florida
corporation ("IMR"), IMR Sub AB Corp., a Florida corporation and a wholly-owned
subsidiary of IMR Holding Corp., which is a wholly-owned subsidiary of IMR (the
"Company"), Fusion System Japan Co., Ltd., a Japanese corporation (Kabushiki
Kaisha) ("Fusion"), ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ("Alfant"), ▇▇▇▇▇ ▇▇▇▇▇▇ ("Umylny"),
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ("▇▇▇▇▇▇"), ▇▇▇ ▇. ▇▇▇▇ ("▇▇▇▇"), ▇▇▇▇▇ ▇▇▇▇▇▇ ("▇▇▇▇▇▇"),
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇"), ▇▇▇ ▇▇▇▇▇▇ ("▇▇▇▇▇▇"), ▇▇▇▇ ▇▇▇▇▇ ("▇▇▇▇▇"), ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ("▇▇▇▇▇▇"), ▇▇▇▇▇ ▇▇▇▇▇▇▇ ("English"), ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇"), ▇▇▇
▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇"), ▇▇▇▇ ▇▇▇▇▇ ("▇▇▇▇▇"), ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ("▇▇▇▇▇▇"), ▇▇▇▇▇
▇. ▇▇▇▇▇ ("▇▇▇▇▇"), ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇▇") and Mami Alfant ("Ma.
Alfant") (collectively, Alfant, Umylny, Ribble, Chun, Trehan, Gaboury, Rogers,
Hyman, Tucker, English, Howells, Gardner, Fujii, Siegel, Weber, Wolfthal and Ma.
Alfant, are referred to as the "Fusion Shareholders"). Pursuant to the
Agreement, the Company will acquire and the Fusion Shareholders will transfer
all their outstanding shares of capital stock of Fusion ("Fusion Stock") (the
"Acquisition"). Pursuant to the Acquisition, all of the issued and outstanding
shares of Fusion Stock will be transferred to IMR in consideration for shares of
unregistered common stock of IMR (the "IMR Common Stock"), all as provided in,
and subject to the terms and conditions of, the Agreement. Unless otherwise
indicated, capitalized terms not defined in this Certificate have the meanings
set forth in the Agreement.
The undersigned understands that the execution of this Certificate is a
condition precedent to IMR's obligation to consummate the Acquisition and to the
receipt of the shares of IMR Common Stock by the undersigned in connection with
the Acquisition (pursuant to the terms and conditions of the Agreement). IMR
will use the responses in this Certificate to determine whether the issuance of
such shares of IMR Common Stock will meet the requirements of applicable United
States federal and state securities laws.
Your responses to the questions set forth in this Certificate and the
representations you make in this Certificate will be kept confidential at all
times. However, by signing this Certificate, you agree that IMR or Fusion may
present this Certificate to such parties as it deems appropriate to establish
the availability of exemptions from registration under federal and state
securities laws. FAILURE TO COMPLETE THIS CERTIFICATE COULD RESULT IN THE
NON-CONSUMMATION OF THE ACQUISITION. If the answer to any question below is
"none" or "not applicable", please so indicate.
Please COMPLETE, SIGN, DATE and FAX one copy of this Certificate no
later than March 19, 1999 (with original to follow by mail) to the attention of
▇▇▇ ▇▇▇▇▇▇, Esq., ▇▇▇▇▇▇▇▇
1
& ▇▇▇▇▇▇▇▇ LLP, AIG Building, 7th Floor, ▇-▇-▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇-▇▇, ▇▇▇▇▇
▇▇▇-▇▇▇▇; facsimile number: (▇▇) ▇▇▇▇-▇▇▇▇; telephone number: (▇▇)▇▇▇▇-▇▇▇▇.
1. BACKGROUND INFORMATION.
1.1 SHAREHOLDER IDENTIFICATION.
(a) Name of individual or entity:
(b) Address of principal place of business (or, if an
individual, residence address):
___________________________________
___________________________________
___________________________________
___________________________________
(c) Daytime Telephone Number:
___________________________________
(d) Evening Telephone Number:
___________________________________
2. REPRESENTATIONS AS TO STATUS AS AN ACCREDITED INVESTOR.
2.1 DEFINITION OF ACCREDITED INVESTOR. The undersigned understands that
Rule 501 under Regulation D promulgated under the Securities Act of 1933, as
amended (the "Securities Act"), defines an "accredited investor" as, among other
things, any natural person coming within any one of the following categories:
(a) Any natural person whose individual net worth, or
joint net worth with that person's spouse, at the time of his or her acquisition
exceeds $1,000,000;
(b) Any natural person who had (i) an individual
income in excess of $200,000 in each of the two most recent years and who
reasonably expects an income in excess of $200,000 in the current year or (ii) a
joint income with that person's spouse in excess of $300,000 in each of the two
most recent years and who reasonably expects a joint income in excess of
$300,000 in the current year;
2
2.2 OTHER DEFINITIONS.
(a) NET WORTH DETERMINATION. For the purposes of
category 2.1(a), the term "net worth" means the excess of total assets over
total liabilities. In computing net worth, the undersigned's principal residence
must be valued either at (A) cost, including the cost of improvements, net of
current encumbrances upon the property or (B) the appraised value of the
property as determined upon a written appraisal used by an institutional lender
making a loan to the individual secured by the property, including the cost of
subsequent improvements, net of current encumbrances upon the property.
(b) INCOME DETERMINATION. In determining income, the
undersigned should add to his or her adjusted gross income any amounts
attributable to tax exempt income received, losses claimed as a limited partner
in any limited partnership, deductions claimed, depletion, contributions to an
▇▇▇ or ▇▇▇▇▇ retirement plan, alimony payments and any amount by which income
from long-term capital gains has been reduced in arriving at adjusted gross
income.
2.3 REPRESENTATION AS TO STATUS AS AN ACCREDITED
INVESTOR.
(a) INSTRUCTIONS: Please indicate by checking the
appropriate box whether the undersigned is an accredited investor within the
meaning of Regulation D, and if so by virtue of which of the above categories.
[ ] The undersigned hereby represents that the undersigned is
an "accredited investor" within the meaning of Regulation D,
and is included within the following accredited investor
category or categories defined above (circle applicable
categories):
2.1(a) 2.1(b)
[ ] The undersigned is not an "accredited investor" within the
meaning of Regulation D, because the undersigned is not
included in any of the above categories (a) or (b).
3. REPRESENTATIONS AS TO IDENTITY. The undersigned represents that he or
she is an individual.
4. INVESTMENT BACKGROUND.
4.1 PRIVATE PLACEMENT EXEMPTION. The undersigned understands that an
exemption from registration under the Securities Act and applicable state
securities laws may still be available to IMR for the offer and sale of IMR
Common Stock to shareholders of the Company
3
that do not meet the "accredited investor" categories of Regulation D described
above, provided that such shareholders possess certain investment experience.
1. INDIVIDUALS. Please provide the following
information:
(a) PERSONAL.
Date of Birth:
Social Security Number:
(b) BUSINESS.
Occupation:
Number of Years:
Present Employer:
Position/Title:
(c) RESIDENCE INFORMATION.
(i) In the space provided below, list below
the state(s) in which you have maintained your principal residence during the
past 3 years and the approximate dates that you resided in each such state.
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(ii) Do you maintain a residence in any
other state? If yes, please list in which state(s).
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(d) EDUCATIONAL BACKGROUND. In the space provided
below, please describe your educational background and degrees obtained, if any.
________________________________________________________________________________
________________________________________________________________________________
4
________________________________________________________________________________
(e) AFFILIATION. If you have any pre-existing
personal or business relationship with IMR or any of its officers, directors or
controlling persons, please describe the nature and duration of such
relationship.
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(f) BUSINESS AND FINANCIAL EXPERIENCE. Do you believe
you have adequate business, financial and investment experience to evaluate the
merits and risks associated with the merger and the capacity to protect your
economic interests? Yes ___ No ___. If you marked "Yes", please describe in
reasonable detail the nature and extent of your business, financial and
investment experience that you believe gives you the capacity to evaluate the
merits and risks associated with the Acquisition and the capacity to protect
your economic interests.
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(g) FINANCIAL ADVISORS. In evaluating your investment
decision in the Acquisition, will you be using the services of any investment
advisors or investment representatives? If yes, please identify such person(s),
providing the address and telephone number. If the person identified below is
acting as your "acquisition representative" within the meaning of Rule 501(h)
under Regulation D, by identifying such person below, you hereby acknowledge in
writing for purposes of Rule 501(h)(3) under Regulation D that such person is
assisting you in evaluating the risks and merits of your investment decision in
connection with the Acquisition.
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
5. SHAREHOLDER INVESTMENT REPRESENTATIONS. In connection with the undersigned's
investment decision in connection with the Acquisition and the shares of IMR
Common Stock to be received by the undersigned pursuant thereto, the undersigned
hereby makes the investment representations set forth in this Section 5. THE
UNDERSIGNED HEREBY EXPRESSLY ACKNOWLEDGES THAT IMR WILL BE RELYING ON THESE
REPRESENTATIONS IN ESTABLISHING THE AVAILABILITY OF EXEMPTIONS FROM REGISTRATION
UNDER SECTION 5 OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS.
5
5.1 INVESTMENT. The IMR Common Stock to be issued to the undersigned
pursuant to the Acquisition will be acquired for investment for the
undersigned's own account, not as a nominee or agent, and not with a view to the
sale or distribution of any part thereof in violation of the Securities Act, and
the undersigned has no present intention of transferring, granting any
participation in, or otherwise distributing the same. The undersigned represents
that the entire legal and beneficial interest of the IMR Common Stock to be
received in the Acquisition will be held for the undersigned's account only, and
neither in whole or in part for any other person. By executing this Certificate,
the undersigned further represents that the undersigned has no present contract,
undertaking, agreement or arrangement with any person to transfer, transfer or
grant participation to any third person, with respect to any of the IMR Common
Stock to be received by the undersigned pursuant to the Acquisition.
5.2 PRIVATE PLACEMENT EXEMPTION. The undersigned understands and
acknowledges that the issuance of the IMR Common Stock pursuant to the Agreement
is being effected on the basis that the issuance of such securities is exempt
from registration pursuant to Section 4(2) of the Securities Act (either
pursuant to Rule 506 or otherwise) or Regulation D and Regulation S promulgated
thereunder and that the IMR's reliance upon such exemptions is predicated in
part upon the undersigned's representations made in this Certificate.
5.3 EXPERIENCE; INVESTMENT ADVISORS; ACCESS TO INFORMATION. The
undersigned further represents that such shareholder either acting alone or
after consultation with his acquisition representative, legal advisor and tax
advisor: (a) has such knowledge and experience in financial and business matters
as to be capable of evaluating the merits and risks of the undersigned's
prospective investment in the shares of IMR Common Stock to be received by the
undersigned in the Acquisition; (b) has received copies of IMR's Annual Report
on Form 10-K filed with the Securities and Exchange Commission (the
"Commission") for the year ended December 31, 1997, IMR's Quarterly Reports on
Form 10-Q filed with the Commission for the periods ending March 31, 1998, June
30, 1998, and September 30, 1998, IMR's Current Reports on Form 8-K filed with
the Commission on May 28, 1998, July 29, 1998, and January 15, 1999, and IMR's
proxy statement filed with the Commission on May 4, 1998; (c) has received all
the information such shareholder has requested from IMR that such shareholder or
its advisors considers necessary or appropriate in making the investment
decision in connection with the Acquisition; (d) has the ability to bear the
economic risks of the undersigned's prospective investment; and (e) is able,
without materially impairing such shareholder's financial condition, to hold the
IMR Common Stock for an indefinite period of time and to suffer complete loss of
the investment.
5.4 RESTRICTIVE LEGEND. Each certificate representing IMR Common Stock
issued to the undersigned pursuant to the Acquisition and any shares issued or
issuable in respect of any such IMR Common Stock upon any stock split, stock
dividend, recapitalization, or similar event, shall be stamped or otherwise
imprinted with legends in substantially the following form until such time as
such IMR Common Stock is registered under the Securities Act or may otherwise be
transferred without restriction pursuant thereto (in addition to any legend
required under applicable state securities laws):
6
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED
FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED ("SECURITIES ACT"). THESE
SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN EXEMPTION UNDER THE SECURITIES ACT.
5.5 OTHER LEGENDS. The certificates evidencing the IMR Common Stock
shall also bear any legend required pursuant to any state, local or foreign law
governing such securities.
5.6 NO REGISTRATION. The undersigned understands and acknowledges that
the IMR Common Stock has not been registered under the Securities Act or any
state securities act and the IMR Common Stock must be held indefinitely unless
subsequently registered under the Securities Act and all applicable state
security acts or an exemption from such registration is available.
5.7 RESTRICTION ON TRANSFERS. The undersigned acknowledges that the IMR
Common Stock shall not be transferable except upon the conditions specified in
this Certificate.
5.8 TRANSFER PROCEDURES AND REQUIREMENTS. Prior to any proposed
transfer of any IMR Common Stock, unless there is in effect a registration
statement under the Securities Act covering the proposed transfer, the
undersigned shall give written notice to IMR of its intention to effect such
transfer. Each such notice shall describe the manner and circumstances of the
proposed transfer in sufficient detail, and shall, if IMR so requests, be
accompanied by either (i) a written opinion of legal counsel who shall be
reasonably satisfactory to IMR, addressed to IMR and reasonably satisfactory in
form and substance to IMR's counsel, to the effect that the proposed transfer of
IMR Common Stock may be effected without registration under the Securities Act,
or (ii) a "no-action" letter from the Commission to the effect that the transfer
of such securities without registration will not result in a recommendation by
the staff of the Commission that action be taken with respect thereto, whereupon
the holder of such IMR Common Stock shall be entitled to transfer such shares of
IMR Common Stock in accordance with the terms of the notice delivered by the
holder to IMR. Each certificate evidencing the shares of IMR Common Stock
transferred as above provided shall bear the appropriate restrictive legend set
forth in Section 5.4 above, except that such certificate shall not bear such
restrictive legend if in the opinion of counsel for IMR such legend is not
required in order to establish compliance with any provisions of the Securities
Act.
5.9 RULE 144. The shares of IMR Common Stock to be received by the
undersigned in the Acquisition constitute "restricted securities" within the
meaning of Rule 144 promulgated under the Securities Act. The undersigned is
familiar with the provisions of Rule 144 which, in substance, currently permit
limited public resale of "restricted securities" acquired, directly or
indirectly from the issuer thereof (or from an affiliate of such issuer) in a
non-public offering subject to the satisfaction of certain conditions,
including, among other things: (i) a public
7
trading market then exists for the IMR Common Stock, (ii) the availability of
certain public information about IMR, (iii) the resale occurring not less than
one year after the party has acquired, and made full payment for, within the
meaning of Rule 144, the securities to be sold, and (iv) the sale being made
through a broker in an unsolicited "broker transaction" or in transactions
directly with a market maker (as said term is defined under the Securities
Exchange Act) and the amount of securities being sold during any three month
period not exceeding the specified limitations stated therein, if applicable.
The undersigned further understands that at the time the undersigned wishes to
transfer shares of IMR Common Stock there may be no public market upon which to
make such a sale, and that, even if such a public market then exists, IMR may
not satisfy the current public information requirements of Rule 144, and that,
in such event, the undersigned would be precluded from transferring the shares
of IMR Common Stock received from IMR under Rule 144 even if the one year
minimum holding period has been satisfied. The undersigned further understands
that in the event all of the applicable requirements of Rule 144 are not
satisfied, registration under the Securities Act, compliance with some other
exemption from registration under the Securities Act would be required to
transfer the shares of IMR Common Stock received from IMR. The undersigned
further understands that he may be precluded from transferring shares of IMR
Common Stock received from IMR if at the time of the desired sale he is in
possession of material not-publicly available information concerning IMR.
5.10 OWNERSHIP OF COMPANY COMMON STOCK. The undersigned is the sole
record and beneficial owner of the Fusion Stock of the amount set forth next to
his name on the signature page to this Certificate. Except as set forth in the
Shareholders Agreement dated September 12, 1996 by and among Fusion Systems
Japan, Inc. and the shareholders listed on the signature pages thereto, and as
amended by the Waiver and Amendment No. 1 to the Shareholders Agreement dated as
of November 18, 1997, which will terminate as of the Closing, such Fusion Stock
is not subject to any claim, lien, pledge, charge, security interest or other
encumbrance or to any rights of first refusal of any kind, and the undersigned
has not granted any rights to acquire such shares to any other person or entity.
The undersigned has the sole right to transfer such shares. Such shares
constitute all of the Fusion Stock owned, beneficially or of record, by the
undersigned.
5.11 TAX MATTERS. The undersigned has had an opportunity to review with
its own tax advisors the tax consequences to the undersigned of the Acquisition
and the transactions contemplated by the Agreement. The undersigned understands
that it must rely solely on its advisors and not on any statements or
representations by IMR, the Company, Fusion or any of their attorneys,
investment advisors, accountants or other agents with respect to tax matters.
8
IN WITNESS WHEREOF, the undersigned has executed this Certificate this
_____ day of ________, 1999.
_______________________________
Print Name of Shareholder
_______________________________
Signature of Authorized Signatory
_______________________________
Print Name of Authorized Signatory
(if signatory is representing an entity)
_______ Shares of Fusion Stock Beneficially Owned
9